- 4 - On July 8, 2005, respondent issued the aforementioned notice of deficiency. Petitioners then filed a timely petition with this Court. A trial was held on March 5, 2007, in Knoxville, Tennessee. Discussion I. Burden of Proof As a general rule, the Commissioner’s determination of a taxpayer’s liability is presumed correct, and the taxpayer bears the burden of proving that the determination is improper. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). However, pursuant to section 7491(a), the burden of proof on factual issues that affect the taxpayer’s tax liability may be shifted to the Commissioner where the “taxpayer introduces credible evidence with respect to * * * such issue”. In the instant case, petitioners have neither asserted nor demonstrated that they satisfied the requirements of section 7491(a), including the requirement to maintain required records, to shift the burden of proof onto respondent with respect to any factual issue. Consequently, the burden of proof remains on petitioners. II. General Deduction Rules Deductions are a matter of legislative grace, and the taxpayer must maintain adequate records to substantiate the 3(...continued) gross income. See sec. 67(a). The amount of petitioners’ total reported miscellaneous deductions was $23,269.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 NextLast modified: November 10, 2007