Tax Procedure: Naked Assessments, New Matter, and the Burden of Proof, a Procedural Grab Bag

shutterstock_449681443The burden of proof is important in any litigation. While this is equally true in tax cases, there are some special rules that apply. For example, a tax assessment issued by the IRS is subject to a presumption of correctness, leaving the taxpayer to establish, by a preponderance of the evidence, that the assessment is incorrect. See Helvering v Taylor, 293 U.S. 507, 515 (1935). But that presumption may not apply if the assessment is “naked” and lacks any foundation. See United States v. Janis, 428 U.S. 433, 441-42 (1976). In a similar vein, while the burden of proof is generally on the taxpayer, if the IRS asserts new matter in its answer, the government will bear the burden of proof.… Read More

Tax Procedure: The Tax Court Confirms that the IRS Can Raise New Issues

tax courtTax Court cases generally follow a pattern:

  • The IRS issues a notice of deficiency to the taxpayer, telling her she owes additional tax and explaining why;
  • The unhappy taxpayer files a petition with the Tax Court seeking a redetermination;
  • The IRS Office of Chief Counsel responds by filing an answer;
  • The taxpayer has the burden of proof, unless the IRS raises new issues in its answer, in which case the government has the burden of proof. Tax Ct. R. 142(a)(1).

While this has been going on for years, one couple recently sought to break the mold, arguing that the IRS could not introduce new issues into a case following its administrative determination.… Read More