RULE 142. BURDEN OF PROOF1
- (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 Section 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).
1 The amendments to paragraph (a) are effective for court proceedings
arising in connection with examinations commencing after July 22, 1998;
except that in any case in which there is no examination, the amendments
apply to court proceedings arising in connection with taxable periods or
events beginning or occurring after July 22, 1998.
The amendment deleting paragraph (f) is effective as of June 30, 2003.
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