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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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Last modified: March 27, 2008