Attorney-at-Law

STILL UNANSWERED – A CAUSERIE

In Uncategorized on 10/16/2019 at 13:53

I wondered yesterday why the Tax Court had not answered the question of where the burden of proof lies when IRS folds in an innocent spousery, but the intervenor wants to keep fighting. Does the burden of proof somehow shift to the intervenor?

On reflection, why should Judge Buch, or any other Judge, waste time on this? Let me waste some time.

The burden of proof is on petitioner and remains on petitioner in an innocent spouse case, like all other Tax Court cases.

Section 7491(a) restates a simple rule: where petitioner has adduced credible evidence on any material point at issue, IRS must carry the burden of proof on that issue. But carrying the burden in that case means producing credible evidence to rebut, which is another way of saying bears the burden of going forward. I say that all Section 7491(a) does is restate what was always the rule, unless Congress meant that “any credible evidence” is something less than “credible evidence which, if not rebutted, would entitle the proponent to judgment in its favor.” I can’t tell the difference.

Anyway, judges routinely duck that one by going with “preponderance of the evidence,” regardless of who has the nominal burden of proof and who has that of production.

Innocent spouseries go off on abuse-of-discretion. There is no trial de novo; IRS determines whether any Section 6015 out is available, based on whatever evidence the alleged innocent can adduce and IRS rebut. Tax Court reviews IRS’ NOD as supported (or not) by the administrative record.

The intervenor’s cards are dealt at the hearing on the requesting spouse’s application. Note that Reg. 1.6015-6(a)(1) states that the nonrequesting spouse need not submit any information, but that any information furnished by either spouse will be shared with the other.

So if the nonrequesting spouse (later intervenor) does nothing, following  the Reg. and relying upon IRS to make the running, should IRS fold, the intervenor is stuck. So mox nix that the intervenor objects in Tax Court, all s/he has is what IRS threw away.

I don’t know the background in the Kruja case. I don’t know what happened at the hearing on Habibe’s stand-alone application, but apparently Ermir trusted IRS and folded, even though he was under the gun. When IRS folded, Ermir was on the Michael Corleone.

Takeaway- Nonrequesting spouse, you are under the gun. You must try your case at least as hard as IRS; it costs IRS much less to fold than it could cost you if they do.

As always, I welcome comments.

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