Burden of Proof For IRS Audit, Etc.

Burden of proof is basically a formal legal requirement to proof your side of the story. If you have received a letter or notice from the IRS saying that you owe more tax money to them then you think you do, you will have to prove that their claim is false. When being audited the burden of proof refers to the responsibility of proving that your deductions or entries made on the tax return made by you is true and correct.

Your burden of proof can be met by providing the necessary receipts for the expenses that you have incurred. You should also provide proof that you actually paid the amount on the receipt. In addition you must be able to distinguish between a personal expense and business. You will have to show that the expense was for what you are claiming it was. Then you may have to show that it was ordinary and necessary to have such an expense. Extraordinary expenses are deductible to but may carry a higher burden of proof. 

Sometimes you can shift the burden of proof on to the IRS by providing a notarized statement to them. Auditors know that when you do give them a notarized statement, and file an appeal, that they need to document their workpapers more carefully to defend their positions. Appeals will then consider who will likely prevail in a court case, the taxpayer or the IRS, when making their decisions concerning whether on not you have supported your deductions, and/or position. Please call us at 713-774-4467 and we can help you support a claim for refund, audit documentation, an appeal, or whatever the issues are. 

Burden Of Proof Is On The Taxpayers

As I've stated above, for the most part, the burden of proof is on the taxpayers. Therefore it is essential that you not only keep receipts but consider the items discussed above. When supporting your position on a matter such as whether on not certain income is taxable, you should also look up tax cases that show how the plaintiff supported and won their positions.

Burden of proof: Seek Professional help

When it is necessary to show "burden of proof", it is advisable to seek the advice of a practitioner with a lot of audit and appeal experience. Too many people try to go to an audit by themselves, and after they get the audit adjustment report from the auditor, they seek professional help to reduce the additional taxes charged to them on the report. This is too late. The auditor has already formed an opinion of you is is less likely to accept information to the contrary. 


 

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