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complied under section 7491(a)(2) with all substantiation
requirements, has maintained all required records, and has
cooperated with reasonable requests for witnesses, information,
documents, meetings, and interviews. See H. Conf. Rept. 105-599,
at 239-240 (1998), 1998-3 C.B. 747, 993-994. Here, petitioners
have made no argument directed towards burden of proof and
consequently have not shown that all prerequisites for a shift of
burden have been met. In addition, leaving aside issues of
substantiation recounted more fully below, the above-mentioned
motions to compel production of documents and responses to
interrogatories would suggest that petitioners’ cooperation has
been less than exemplary. The Court therefore cannot conclude
that section 7491(a) effects any shift of burden in the instant
case.
Section 7491(c) provides that “the Secretary shall have the
burden of production in any court proceeding with respect to the
liability of any individual for any penalty, addition to tax, or
additional amount imposed by this title.” The Commissioner
satisfies this burden of production by “[coming] forward with
sufficient evidence indicating that it is appropriate to impose
the relevant penalty” but “need not introduce evidence regarding
reasonable cause, substantial authority, or similar provisions.”
Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Rather, “it is
the taxpayer’s responsibility to raise those issues.” Id. The
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Last modified: November 10, 2007