Tax Decision Making under the New Burden of Proof Rules

Anne M Magro
University of Oklahoma

Beth Stetson
University of Oklahoma

Abstract: In the late 1990’s Congress held hearings into alleged abuses of power by the Internal Revenue Service (“IRS”). Members of Congress argued that the IRS had inordinate and inappropriate power over taxpayers. The hearings and resultant public outcry led to passage of new laws with the stated intention of leveling the playing field for taxpayers and the IRS. One such new law was codified as Internal Revenue Code section (“section”) 7491. Section 7491 provides that the burden of proof in civil tax cases will rest with the IRS (rather than the taxpayer, as previously) in certain instances. The provision’s proponents asserted that it would change the then status quo whereby taxpayers in tax litigation were assumed guilty until proven innocent.

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