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exercise of discretion is without sound basis in fact or law.
See Freije v. Commissioner, 125 T.C. 14, 23 (2005).
The Hunters timely petitioned the Court in response to a
notice of deficiency. The deficiency case was consolidated with
the collection case. The Hunters may challenge their underlying
tax liability in this consolidated proceeding. We review
respondent’s determination of the underlying tax liability de
novo, and we review the determination with respect to the
proposed collection actions for abuse of discretion. See Sego v.
Commissioner, supra; Goza v. Commissioner, supra.
1. The Deficiency in Tax
The Commissioner’s determination is presumed correct, and a
taxpayer generally bears the burden of proving otherwise. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden
may shift to the Commissioner if the taxpayer introduces credible
evidence and satisfies the requirements under section 7491(a)(2)
to substantiate items, maintain required records, and fully
cooperate with the Commissioner’s reasonable requests. Sec.
7491(a). The Hunters have neither argued that section 7491(a)
applies nor established that they complied with the requirements
of section 7491(a)(2). The Hunters therefore bear the burden of
proof.
Section 55 imposes, in addition to all other taxes imposed
by subtitle A, an AMT on noncorporate taxpayers. The
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Last modified: May 25, 2011