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1. Section 7491
Section 74915 was enacted in 1998. See Internal Revenue
Service Restructuring & Reform Act of 1998 (RRA 1998), Pub. L.
105-206, sec. 3001(a), 112 Stat. 685, 726. Section 7491 applies
to court proceedings arising in connection with examinations
beginning after July 22, 1998. See RRA 1998 sec. 3001(c).
Respondent’s examination in this case began after July 22, 1998.
Under section 7491, the burden of proof is placed on the
Secretary in any court proceeding if the taxpayer:
5 Sec. 7491 provides in pertinent part:
SEC. 7491. BURDEN OF PROOF.
(a) Burden Shifts Where Taxpayer Produces Credible
Evidence.--
(1) General Rule.--If, in any court proceeding, a
taxpayer introduces credible evidence with respect to
any factual issue relevant to ascertaining the
liability of the taxpayer for any tax imposed by
subtitle A or B, the Secretary shall have the burden of
proof with respect to such issue.
(2) Limitations.--Paragraph (1) shall apply with
respect to an issue only if--
(A) the taxpayer has complied with the
requirements under this title to substantiate any
item;
(B) the taxpayer has maintained all records
required under this title and has cooperated with
reasonable requests by the Secretary for
witnesses, information, documents, meetings, and
interviews; * * *
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