burden of proof in dealing with IRS

[DING-DONG YO]

Who has the burden of proof (taxpayer or IRS) and is it different for income and deductions.

Also, any links to support your stance?

[BigBiceps]

On the taxpayer.

The only situation, I might be able to think of that it is on the IRS is if criminal charges are filed.

[Lottery Larry]

[ QUOTE ]
Who has the burden of proof (taxpayer or IRS) and is it different for income and deductions.

Also, any links to support your stance?

[/ QUOTE ]

No links, but well-known that burden of proof, at least initially, is on the taxpayer, not the IRS.

[broiler]

For deductions, it is the taxpayer.

Deductions are a matter of legislative grace, so that the taxpayer must establish his right to take them. Therefore, when challenged by IRS, taxpayer normally has the burden of proof that he is entitled to deduct the claimed amount. Source: Underwood, H.A. v. Com., (1932, CA4) 10 AFTR 1269 , 56 F2d 67 , 3 USTC ¶862

Also, Where the taxpayer didn't testify and no other evidence of substantiation was presented to the court, the taxpayer failed to meet his burden of proof and the deductions were disallowed.
Source: Pridgen, Marjorie v. Com., (1970, CA2) 26 AFTR 2d 70-5807 , 434 F2d 67 , 70-2 USTC ¶9708 , affg(1969) TC Memo 1969-138 , PH TCM ¶69138 , 28 CCH TCM 717

Sorry if the formatting is poor since I copy and pasted out of RIA and I had to cut around links so that I wouldn't give everyone access to the firm's account.

I am working on theanswer for income, but I found the deduction answer in under 2 minutes and posted right away.

[broiler]

For income, it appears that the IRS has initial burden of proof, but it is easily switched to the taxpayer.

IRS has the burden of proof in any court proceeding as to any factual issue relating to income or self-employment taxes if the taxpayer introduces credible evidence as to that issue and meets certain requirements relating to substantiation, recordkeeping, and cooperation with reasonable IRS requests for witnesses, information, documents, etc.
Note the taxpayer's burden to produce credible evidence in order to cause the IRS to have burden of proof. Source: IRC Section 7491(a).

Also, In the case of an individual taxpayer, IRS has the burden of proof in any court proceeding with respect to any income item that IRS reconstructed solely through the use of statistical information on unrelated taxpayers.
Source: IRC Section 7491(b)

Finally, In deficiency cases in which neither [Section] applies, the taxpayer ordinarily will have the burden of proof. In the absence of competent evidence to the contrary, there is a presumption that IRS's deficiency determination is correct.
Sources: Bilsky, Nathan, (1958) 31 TC 35 , petition dismd(1959, CA8) 271 F2d 414 ; Poole, Bobby, (1978) TC Memo 1978-431 , PH TCM ¶78431 , 37 CCH TCM 1781 ; Parris, Nathan, (1980) TC Memo 1980-383 , PH TCM ¶80383 , 40 CCH TCM 1230 .

Again, sorry for the poor formatting due to the copy and paste method.

The Code clearly states that the IRS has the burden of proof after the taxpayer shows credible evidence. I would say that the evidence requirement of the taxpayer places the burden of proof on the taxpayer.

[MagCFO]

yeah, telling the IRS to "prove it!" wouldn't be too effective.