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Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
However, pursuant to section 7491(a)(1), 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 [factual] issue”.
The burden will shift only if the taxpayer has, inter alia,
complied with substantiation requirements pursuant to the
Internal Revenue Code and “cooperated with reasonable requests by
the Secretary for witnesses, information, documents, meetings,
and interviews”. Sec. 7491(a)(2). In the instant case,
petitioner did not comply with the substantiation requirements
and failed to present credible evidence at trial. Accordingly,
the burden remains on petitioner.
I. Dependency Exemption Deductions
Section 151 allows a taxpayer to deduct a personal
exemption, as well as dependency exemptions for the taxpayer’s
dependents. See sec. 151(a), (c). Section 152, in 2004, defined
“dependent”, in pertinent part, to include “An individual * * *
who, for the taxable year of the taxpayer, has as his principal
place of abode the home of the taxpayer and is a member of the
taxpayer’s household”. Sec. 152(a)(9). For an individual to be
considered a dependent for the taxable year of the taxpayer, he
or she must, inter alia, pass the following three tests: (1) The
individual’s gross income must be less than the exemption amount,
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Last modified: November 10, 2007