- 19 -
We disagree. The general rule applicable to a party having
the burden of proof is that a loss of records may preclude
proving a material fact. In Burnet v. Houston, 283 U.S. 223, 228
(1931), the Supreme Court explained: “The impossibility of
proving a material fact upon which the right to relief depends
simply leaves the claimant upon whom the burden rests with an
unenforceable claim, a misfortune to be borne by him, as it must
be borne in other cases, as the result of a failure of proof.”
The Court of Appeals for the Second Circuit, in Andrew
Crispo Gallery, Inc. v. Commissioner, supra, acknowledged that
principle, but the majority of the Court of Appeals panel
deciding that case determined that a different rule must apply
when the Government itself is responsible for the taxpayer's
inability to produce documentary evidence. In such a case, the
majority considered two modifications to the holding of Burnet v.
Houston, supra, appropriate:
First, where the taxpayer’s records have been seized
and lost by the government, the trier should at least
be permitted to infer that the true facts are as
alleged by the taxpayer to be set forth in the
documents seized and lost. Second, in those instances
where the taxpayer can offer credible evidence that the
seized and lost record was properly maintained by the
taxpayer, prior to seizure, and accurately reflected
the facts that the taxpayer alleges it purports to
reflect, the taxpayer is entitled to a presumption that
the record would so reflect those alleged facts. * * *
[Andrew Crispo Gallery, Inc. v. Commissioner, supra at
1343-1344.]
5(...continued)
to Petitioners' Reply Brief". Cf. Ware v. Commissioner, 906 F.2d
62, 65-66 (2d Cir. 1990), affg. T.C. Memo. 1989-165.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011