Joseph P. & Mary A. Dyer - Page 10




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          indicates that any income from the policy’s lapse would be the              
          firm’s income and that a Form 1099-R would be sent to the firm.             
               Section 6201(d) provides as follows:                                   
                    SEC. 6201(d).  Required Reasonable Verification of                
               Information Returns.–-In any court proceeding, if a                    
               taxpayer asserts a reasonable dispute with respect to                  
               any item of income reported on an information return                   
               filed with the Secretary under subpart B or C of part                  
               III of subchapter A of chapter 61 by a third party and                 
               the taxpayer has fully cooperated with the Secretary                   
               (including providing, within a reasonable period of                    
               time, access to and inspection of all witnesses,                       
               information, and documents within the control of the                   
               taxpayer as reasonably requested by the Secretary), the                
               Secretary shall have the burden of producing reasonable                
               and probative information concerning such deficiency in                
               addition to such information return.                                   
               Petitioners have asserted a reasonable dispute to the item             
          of income reported to the IRS on the information return and                 
          cooperated fully with respondent’s requests.  Accordingly,                  
          respondent has the burden of producing information to show that             
          petitioners received income.                                                
               There is no evidence in the record that petitioners received           
          the income in question.  Indeed, the evidence in the record                 
          indicates that the owner of the policy in question was                      
          petitioner’s former law firm.  Petitioner retired from the firm 2           
          years before the insurance policy lapsed, and neither he nor his            
          wife received any payments from the insurance company.                      
          Accordingly, we hold that petitioners are not liable for a                  









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