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makes of premiums for an accident or health insurance policy
covering an employee. Sec. 1.106-1, Income Tax Regs.
The record establishes that Mr. Eyler paid $5,066 of premi-
ums for Mr. Eyler’s Wellmark health policy. However, petitioners
have failed to produce evidence, let alone credible evidence, see
sec. 7491(a)(1), such as business records or canceled checks
drawn on a business checking account of Mr. Eyler, that estab-
lishes (1) that Mr. Eyler paid those premiums in his capacity as
Ms. Eyler’s employer pursuant to the unwritten health plan and
(2) that he did not pay those premiums in his individual capacity
as the applicant for, and the primary insured under, Mr. Eyler’s
Wellmark health policy.13
On the record before us, we find that petitioners have
failed to carry their burden of establishing that Mr. Eyler, as
Ms. Eyler’s employer, paid, directly or indirectly, to Ms. Eyler
pursuant to the unwritten health plan the claimed $5,066 of
health insurance premiums in order to reimburse her for expenses
incurred or paid for the medical care of her spouse and
13The parties stipulated that “Audrey Eyler’s salary plus
benefits is reasonable compensation for the work she performed.”
However, the parties have not stipulated, and the record does not
otherwise establish, the “benefits” to which the parties are
referring. We have found that petitioners have failed to carry
their burden of showing that Mr. Eyler paid the premiums for Mr.
Eyler’s Wellmark health policy in his capacity as Ms. Eyler’s
employer pursuant to the unwritten health plan.
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Last modified: March 27, 2008