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In 2002 and 2003, petitioner’s Schedules C showed combined
expenses of $55,301 and gross receipts of $445. Respondent
denied expense deductions beyond the gross receipts earned.
Discussion
I. The Burden of Proof
Generally, the Commissioner’s determinations are presumed
correct, and the taxpayer bears the burden of proving those
determinations wrong. Rule 142(a); INDOPCO, Inc. v Commissioner,
503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115
(1933). Under section 7491, the burden of proof may shift from
the taxpayer to the Commissioner if the taxpayer produces
credible evidence with respect to any factual issue relevant to
ascertaining the taxpayer’s tax liability. Sec. 7491(a)(1). In
this case there is no such shift because petitioner neither
alleged that section 7491 was applicable nor established that she
fully complied with the requirements of section 7491(a)(2). The
burden of proof remains on petitioner.
II. The Period of Limitations
Petitioner expressed concern in her petition that the period
3(...continued)
Benson Exposition, Inc. has not filed a corporate return since
its inception. Although there is some confusion as to whether
the activities in this case were conducted by Benson Exposition,
Inc., or by petitioner herself doing business as Lila Osborne
Memorial, the analysis remains the same. See sec. 1.183-1(f),
Income Tax Regs. (explaining that a taxpayer’s intent is
attributable to his or her wholly owned S corporation); see also
sec. 1.183-1(d)(1), Income Tax Regs.
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