- 20 - OPINION I. Burden of Proof Petitioners argue that the burden of proof should be shifted to respondent under section 7491(a) because petitioners produced credible evidence and satisfied the requirements of section 7491(a)(2). Generally, the Commissioner’s determinations are presumed correct, and the taxpayer bears the burden of proving that those determinations are erroneous. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933). Section 7491 is applicable to court proceedings arising in connection with examinations commenced after July 22, 1998. Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. Under section 7491(a)(1), the burden of proof shifts to the Commissioner, subject to certain limitations, where a taxpayer introduces credible evidence with respect to a factual issue relevant to ascertaining the taxpayer’s tax liability if the taxpayer introduces credible evidence regarding the issue. See Ashley v. Commissioner, T.C. Memo. 2000-376. Section 7491(a)(1) applies with respect to a factual issue only if the requirements of section 7491(a)(2) are satisfied. Section 7491(a)(2) requires that a taxpayer have maintained all records required by the Internal Revenue Code, cooperated with reasonable requests by the Secretary for witnesses, information, documents,Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: March 27, 2008