Laurel Ann Curtis - Page 11




                                       - 11 -                                         


               2(...continued)                                                        
          (1970), affd. 445 F.2d 985 (10th Cir. 1971), in cases going to              
          the Court of Appeals, to be governed by the Weimerskirch line of            
          cases, we defer to the Court of Appeals’ allocation to the                  
          Commissioner of the burden of proof with respect to the necessary           
          minimal foundation.  We offer the following remarks,                        
          nevertheless, for consideration by the Court of Appeals.                    
          The rule first stated in Weimerskirch results from the Court                
          of Appeals interpretation of United States v. Janis, 428 U.S.               
          433, 441 (1976), a combination refund and collection case,                  
          wherein the Supreme Court held that an assessment of tax is a               
          “naked assessment”, and not subject to the usual rule imposing              
          the burden of proof in tax cases on the taxpayer, if the                    
          assessment is “without rational foundation and excessive”.  See             
          Foster v. Commissioner, 756 F.2d 1430, 1439 (9th Cir. 1985),                
          affg. in part and vacating in part 80 T.C. 34 (1983); see also              
          Estate of Magnin v. Commissioner, 184 F.3d 1074, 1081 (9th Cir.             
          1999), revg. and remanding T.C. Memo. 1996-25.  In Janis, the               
          Supreme Court stated that, notwithstanding some debate among the            
          Courts of Appeals as to the allocation of the burden of proof in            
          a tax case when there is positive evidence that the assessment is           
          incorrect, there was no debate among the Courts of Appeals that,            
          where the assessment is shown to be naked and without any                   
          foundation, the rule to be applied is the rule of Helvering v.              
          Taylor, 293 U.S. 507 (1935).  In Helvering v. Taylor, supra at              
          514, the Supreme Court held that an invalid determination of tax            
          (one that is without rational foundation and excessive) may be              
          set aside notwithstanding that the taxpayer does not show the               
          correct amount (if any) of tax.  The Court added:                           
          “Unquestionably the burden of proof is on the taxpayer to show              
          that the Commissioner’s determination is invalid.”  Id. at 515.             
               The Court of Appeals’ placement on the Commissioner of the             
          burden to construct a minimal evidentiary foundation linking the            
          taxpayer with the source of any unreported income appears                   
          inconsistent with the quoted language from Taylor.  It is                   
          inconsistent with the general rule in deficiency cases that the             
          taxpayer bears the burden of proof, see Welch v. Helvering, 290             
          U.S. 111, 115 (1933), and in refund cases that the taxpayer bears           
          the burden of showing the amount that he is owed, see United                
          States v. Janis, supra at 440.  It is also inconsistent with                
          Congress’s intent as expressed in sec. 7491, which was added to             
          the Code by the Internal Revenue Service Restructuring and Reform           
          Act of 1998, Pub. L. 105-206, sec. 3001(c)(2), 112 Stat. 685,               
                                                             (continued...)           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011