Jimmy A. Prince - Page 7

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          section 7491(a) clarifies that taxpayers must prove that they               
          have satisfied the adequate records, substantiation, and                    
          cooperation requirements before that section places the burden of           
          proof upon the Commissioner.4  H. Conf. Rept. 105-599, at 239               
          (1998), 1998-3 C.B. 747, 993 (“The taxpayer has the burden of               
          proving that it meets each of these conditions, because they are            
          necessary prerequisites to establishing that the burden of proof            

               SEC. 7491. BURDEN OF PROOF.                                            
                    (a) Burden Shifts Where Taxpayer Produces Credible                
                         (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; * * *                                        
          4 The text of the statute requires that the taxpayer satisfy                
          the remaining (credible evidence) requirement as a condition of             
          placing the burden of proof upon respondent.                                

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