-7-
On their 2002 and 2003 returns, petitioners claimed earned
income credits (EIC) of $352,854 and $489,827, respectively. On
their 2002 return, petitioners did not report any of the gains
that Orion reported in statements to petitioners (which
petitioners received during 2002). On November 15, 2004,
petitioners signed their 2003 return. On November 18, 2004,
respondent received petitioners 2003 return.
OPINION
Generally, respondent’s deficiency determinations set forth
in the notice of deficiency are presumed correct, and petitioners
bear the burden of showing the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Section
7491(a), however, shifts the burden of proof to the Commissioner
with respect to a factual issue affecting the tax liability of a
taxpayer who meets certain conditions.
Petitioners have neither claimed nor shown that they
satisfied the requirements of section 7491(a) to shift the burden
of proof to respondent with regard to any factual issue affecting
the deficiencies in their tax. Accordingly, petitioners bear the
burden of proof. See Rule 142(a).
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