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Internal Revenue Code, § 7491. Burden Of Proof

I.R.C. § 7491(a) Burden Shifts Where Taxpayer Produces Credible Evidence. --
I.R.C. § 7491(a)(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.
I.R.C. § 7491(a)(2) Limitations. --
Paragraph (1) shall apply with respect to an issue only if--
I.R.C. § 7491(a)(2)(A)
the taxpayer has complied with the requirements under this title to substantiate any item;
I.R.C. § 7491(a)(2)(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; and
I.R.C. § 7491(a)(2)(C)
in the case of a partnership, corporation, or trust, the taxpayer is described in section 7430(c)(4)(A)(ii).
Subparagraph (C) shall not apply to any qualified revocable trust (as defined in section 645(b)(1)) with respect to liability for tax for any taxable year ending after the date of the decedent's death and before the applicable date (as defined in section 645(b)(2)).
I.R.C. § 7491(a)(3) Coordination. --
Paragraph (1) shall not apply to any issue if any other provision of this title provides for a specific burden of proof with respect to such issue.
I.R.C. § 7491(b) Use Of Statistical Information On Unrelated Taxpayers. --
In the case of an individual taxpayer, the Secretary shall have the burden of proof in any court proceeding with respect to any item of income which was reconstructed by the Secretary solely through the use of statistical information on unrelated taxpayers.
I.R.C. § 7491(c) Penalties. --
Notwithstanding any other provision of this title, the Secretary shall have the burden of production in any court proceeding with respect to the liability of any individual for any penalty, addition to tax, or additional amount imposed by this title.
(Added Pub. L. 105-34, title III, Sec. 3001(a), Aug. 5, 1997, 111 Stat 788; as amended by Pub. L. 105-277, title IV, Sec. 4002(b), Oct. 21, 1998, 112 Stat 2681.)
Background Notes
AMENDMENTS
1998 - Subsec. (a)(2). Pub. L. 105-277, Sec. 4002(b), amended par. (2) by adding the flush sentence at the end.
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Sec. 4002(b) of Pub. L. 105-277 effective as if included in the provisions of the IRS Restructuring and Reform Act of 1998 to which it relates.
EFFECTIVE DATE
Section 3001(c) of Pub. L. 105-206 provided that:
“(1) In general. -- The amendments made by this section shall apply to court proceedings arising in connection with examinations commencing after the date of the enactment of this Act [enacted: July 22, 1998].
“(2) Taxable periods or events after date of enactment. -- In any case in which there is no examination, such amendments shall apply to court proceedings arising in connection with taxable periods or events beginning or occurring after such date of enactment.”