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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
3(...continued)
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; * * *
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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Last modified: May 25, 2011