Millard D. and Marjorie C. Thomas - Page 7

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               Respondent issued a notice of deficiency on November 8,                
          2004, for the taxable year 2002, and on May 23, 2005, for the               
          taxable year 2003, showing deficiencies of $851 and $893,                   
          respectively.  In response to each notice of deficiency,                    
          petitioners filed a petition with this Court in a timely manner.            
          These cases were consolidated for trial and briefing, and a trial           
          was held on February 7, 2006, in El Paso, Texas.                            
               As a general rule, the Commissioner’s determination of a               
          taxpayer’s liability in the notice of deficiency is presumed                
          correct and the taxpayer bears the burden of proving that the               
          determination is improper.  See 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 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).  Here, the parties             
          agree on the facts.  The sole issue for decision is a legal                 
          issue, and, therefore, section 7491 does not affect the result in           
          these cases.                                                                

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