Congress hopes to shift burden of proof to IRS

April 11, 1998
Web posted at: 8:45 p.m. EDT (0045 GMT)

From CNN Senior Correspondent Charles Bierbauer

WASHINGTON (CNN) -- The U.S. Congress is considering an increase in the burden of proof the Internal Revenue Service bears when it challenges the filings of taxpayers.

Currently, if the IRS challenges a tax filing, the burden of proof is on the taxpayer to prove that the filing is correct.

But pending legislation in Congress would shift the burden of proof to the IRS in cases of individuals and small businesses that wind up in tax court.

Most taxpayers won't notice the difference.

"The bottom line is this provision has more of a political effect than an actual effect because really only 20,000 to 30,000 people a year will be directly impacted by the switch in the burden of proof," said Peter Sepp of the National Taxpayers Union."

The roughly one million taxpayers audited by the IRS will still have to show up with their receipts. And if the dispute goes to court, the taxpayer must still show that they've fully cooperated.

But Congress has been warned it may not be making things simpler.

Chief U.S. Tax Judge Mary Ann Cohen wrote in a letter to Congress that "it is usually simpler and less intrusive" for the taxpayer to produce records "than to have the government conduct an investigation in order to obtain evidence."

Former IRS Commissioner Donald Alexander said "the IRS would have to demand the taxpayer produce voluminous records. The IRS would have to summon taxpayers to give testimony. The IRS would have far fewer audits, but they would be far more draconian audits."

Supporters of the shift believe it could make the IRS more reasonable where there are honest differences. In criminal fraud cases the IRS will continue to bear the burden of proof.

Related stories:

• IRS overhaul cleared by Senate panel - April 1, 1998
• Gore urges rediscovering the 'service' in IRS - March 18, 1998
• Rubin angered by IRS' possible abuse of taxpayers - December 13, 1997

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