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

Charitable Deductions: Appraisals, the IRS and Substantial Compliance

charitable-deductionsSection 170 of the Internal Revenue Code provides a tax deduction for any charitable donation. Cash donations are relatively straight-forward, but donations of property are not. If the value of the donated property exceeds $5,000, there are qualified appraisal rules that apply under the Treasury Regulations. See Treas. Reg. § 1.170A-13(c)(3). The requirements are technical, and they give rise to a fair volume of litigation.

On September 20, 2016, the Tax Court issued a taxpayer-friendly ruling in a case that illustrates both how technical the qualified appraisal rules are and how hard the IRS will fight to enforce them. Cave Buttes, LLC v.Read More

Real Estate Tax Assessments: Ambush by Hearsay Is Not Appropriate

Property TaxWegmans was recently ambushed in a real estate tax assessment appeal: the trial court resorted to an old appraiser’s report to undercut its position and sustain a higher tax assessment. And to make matters worse, it was an appraiser’s report that Wegmans had commissioned.

Last week, the Commonwealth Court reversed, serving up a reminder that the rules of evidence apply in tax cases too. Millcreek Twp. Sch. Dist. v. Erie Cty. Bd. of Assessment Appeals, No. 39 C.D. 2015, 2016 Pa. Commw. LEXIS 260 (Pa. Commw. June 13, 2016).

Wegmans owned two pieces of property in Millcreek Township, Erie County that gave rise to the case.… Read More