Joseph D. & Elizabeth M. Dunne - Page 15

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               Petitioners timely petitioned this Court to redetermine all            
          of respondent’s adjustments.                                                
          I.  Burden of Proof                                                         
               Petitioners contend that under section 7491(a), respondent             
          bears the burden of proof relating to all items in the notice of            
          deficiency.  Petitioners also contend that respondent’s                     
          determinations relating to 1999 are arbitrary and capricious, but           
          we will address that issue separately with respect to those                 
               As a general rule, taxpayers bear the burden of proving that           
          the Commissioner’s determinations are incorrect.  Rule 142(a).              
          However, section 7491(a) may in specific circumstances place the            
          burden on the Commissioner with regard to any factual issue                 
          relating to a taxpayer’s liability for tax if the taxpayers                 
          produce credible evidence with respect to that issue and meet the           
          requirements found in section 7491(a)(2).  The requirements                 
          applicable here are that the taxpayers have (1) complied with all           
          substantiation requirements of the Code, (2) maintained all                 
          required records, and (3) cooperated with reasonable requests by            
          the Secretary for witnesses, information, documents, meetings,              
          and interviews.  The taxpayers bear the burden of proving that              
          they have met the requirements of section 7491(a)(2).  Miner v.             

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Last modified: March 27, 2008