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Profit or Loss From Business, reflecting expense deductions
claimed. Rather, he claims deductions for cash payments to his
crew and for costs of transporting his crew and materials to tile
jobs. We will address these deductions first and then consider
the additions to tax determined by respondent.
I. Burden of Proof
A. Deficiency
In general, a taxpayer bears the burden of proof. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden
of proof on factual issues that affect the taxpayer’s liability
may be shifted to the Commissioner if the taxpayer introduces
credible evidence with respect to such issues and satisfies the
requirements under section 7491(a)(2) to substantiate items,
maintain required records, and cooperate fully with the
Commissioner’s reasonable requests. Sec. 7491(a).
The burden of proof with respect to the deficiency
respondent determined remains with petitioner because he has
neither taken a position as to whether the burden should be
shifted to respondent nor established that he has complied with
the requirements of section 7491(a).4
3(...continued)
that petitioner’s business was a sole proprietorship.
4 Even though petitioner did not assert a reasonable dispute
with respect to the income reported on the Forms 1099-MISC,
Miscellaneous Income, so as to require respondent to verify the
(continued...)
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