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OPINION
I. Unreported Income From Liberty Temp
Generally, the taxpayer bears the burden of proving the
Commissioner’s determinations incorrect. Rule 142(a)(1); Welch
v. Helvering, 290 U.S. 111, 115 (1933). If the taxpayer
introduces credible evidence with respect to any factual issue
relevant to ascertaining the taxpayer’s tax liability, the
Commissioner bears the burden of proof with respect to that
issue. Sec. 7491(a)(1). However, the burden of proof will not
shift to the Commissioner where the taxpayer fails to maintain
records in accordance with the Internal Revenue Code or fails to
cooperate with reasonable requests made by the Commissioner for
witnesses, information, documents, meetings, and interviews.
Sec. 7491(a)(2)(B).
Section 7491(a)(1) does not shift the burden of proof to
respondent with respect to petitioner’s liability for a
deficiency in tax because petitioner has not produced credible
evidence with respect to that issue, nor has petitioner
maintained records or cooperated with respondent’s reasonable
requests. Therefore, petitioner bears the burden of proving
incorrect respondent’s determination that $447,084 received from
Unwrapped is included in petitioner’s income in 2002. Petitioner
has not met this burden.
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Last modified: May 25, 2011