• (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; and
      (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)).
  • (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.

• (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.

• (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.

TITLE 5 - GOVERNMENT ORGANIZATION AND EMPLOYEES

PART I - THE AGENCIES GENERALLY

CHAPTER 5 - ADMINISTRATIVE PROCEDURE

SUBCHAPTER II - ADMINISTRATIVE PROCEDURE

Sec. 556. Hearings; presiding employees; powers and duties; burden of proof; evidence; record as basis of decision

(d) Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof. Any oral or documentary evidence may be received, but the agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence. A sanction may not be imposed or rule or order issued except on consideration of the whole record or those parts thereof cited by a party and supported by and in accordance with the reliable, probative, and substantial evidence. The agency may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the agency, consider a violation of section 557(d) of this title sufficient grounds for a decision adverse to a party who has knowingly committed such violation or knowingly caused such violation to occur. A party is entitled to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. In rule making or determining claims for money or benefits or applications for initial licenses an agency may, when a party will not be prejudiced thereby, adopt procedures for the submission of all or part of the evidence in written form.

Title 26 Appendix, Rule 142: Burden of Proof

TITLE 26 App. > TITLE XIV. > Rule 142

Rule 142. Burden of Proof

(a) General:

(1) The burden of proof shall be upon the petitioner, except as otherwise provided by statute or determined by the Court; and except that, in respect of any new matter, increases in deficiency, and affirmative defenses, pleaded in the answer, it shall be upon the respondent. As to affirmative defenses, see Rule 39.
(2) See Code section 7491 where credible evidence is introduced by the taxpayer, or any item of income is reconstructed by the Commissioner solely through the use of statistical information on unrelated taxpayers, or any penalty, addition to tax, or additional amount is determined by the Commissioner.

(b) Fraud: In any case involving the issue of fraud with intent to evade tax, the burden of proof in respect of that issue is on the respondent, and that burden of proof is to be carried by clear and convincing evidence. Code sec. 7454 (a).

(c) Foundation Managers; Trustees; Organization Managers: In any case involving the issue of the knowing conduct of a foundation manager as set forth in the provisions of Code section 4941, 4944, or 4945, or the knowing conduct of a trustee as set forth in the provisions of Code section 4951 or 4952, or the knowing conduct of an organization manager as set forth in the provisions of Code section 4912 or 4955, the burden of proof in respect of such issue is on the respondent, and such burden of proof is to be carried by clear and convincing evidence. Code sec. 7454 (b).

(d) Transferee Liability: The burden of proof is on the respondent to show that a petitioner is liable as a transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax. Code sec. 6902 (a).

(e) Accumulated Earnings Tax: Where the notice of deficiency is based in whole or in part on an allegation of accumulation of corporate earnings and profits beyond the reasonable needs of the business, the burden of proof with respect to such allegation is determined in accordance with Code section 534. If the petitioner has submitted to the respondent a statement which is claimed to satisfy the requirements of Code section 534 (c), the Court will ordinarily, on timely motion filed after the case has been calendared for trial, rule prior to the trial on whether such statement is sufficient to shift the burden of proof to the respondent to the limited extent set forth in Code section 534 (a)(2).

U.S. v. Minker, 350 U.S. 179; 76 S.Ct. 281 (1956):

“Where administrative action may result in loss of both property and life, or of all that makes life worth living, any doubt as to extent of power delegated to administrative officials is to be resolved in citizen's favor, and court must be especially sensitive to citizen's rights where proceeding is non-judicial." [United States v. Minker, 350 U.S. 179; 76 S.Ct. 281 (1956)[

Hassett v. Welch., 303 US 303, pp. 314 - 315, 82 L Ed 858. (1938):

"In view of other settled rules of statutory construction, which teach that a law is presumed, in the absence of clear expression to the contrary, to operate prospectively; that, if doubt exists as to the construction of a taxing statute, the doubt should be resolved in favor of the taxpayer..." [Hassett v. Welch., 303 US 303, pp. 314 - 315, 82 L Ed 858. (1938)] (emphasis added) 

Spreckels Sugar Refining Co. v. McClain, 192 U.S. 297 (1904):

“Keeping in mind the well-settled rule that the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language, and that where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid.”  Spreckels Sugar Refining Co. v. McClain, 192 U.S. 297 (1904)

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