
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC7491]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                    CHAPTER 76--JUDICIAL PROCEEDINGS
 
                      Subchapter E--Burden of Proof
 
Sec. 7491. Burden of proof


(a) Burden shifts where taxpayer produces credible evidence

                          (1) General rule

        If, in any court proceeding, a taxpayer introduces credible 
    evidence with respect to any factual issue relevant to ascertaining 
    the liability of the taxpayer for any tax imposed by subtitle A or 
    B, the Secretary shall have the burden of proof with respect to such 
    issue.

                           (2) Limitations

        Paragraph (1) shall apply with respect to an issue only if--
            (A) the taxpayer has complied with the requirements under 
        this title to substantiate any item;
            (B) the taxpayer has maintained all records required under 
        this title and has cooperated with reasonable requests by the 
        Secretary for witnesses, information, documents, meetings, and 
        interviews; and
            (C) in the case of a partnership, corporation, or trust, the 
        taxpayer is described in section 7430(c)(4)(A)(ii).

    Subparagraph (C) shall not apply to any qualified revocable trust 
    (as defined in section 645(b)(1)) with respect to liability for tax 
    for any taxable year ending after the date of the decedent's death 
    and before the applicable date (as defined in section 645(b)(2)).

                          (3) Coordination

        Paragraph (1) shall not apply to any issue if any other 
    provision of this title provides for a specific burden of proof with 
    respect to such issue.

(b) Use of statistical information on unrelated taxpayers

    In the case of an individual taxpayer, the Secretary shall have the 
burden of proof in any court proceeding with respect to any item of 
income which was reconstructed by the Secretary solely through the use 
of statistical information on unrelated taxpayers.

(c) Penalties

    Notwithstanding any other provision of this title, the Secretary 
shall have the burden of production in any court proceeding with respect 
to the liability of any individual for any penalty, addition to tax, or 
additional amount imposed by this title.

(Added Pub. L. 105-206, title III, Sec. 3001(a), July 22, 1998, 112 
Stat. 726; amended Pub. L. 105-277, div. J, title IV, Sec. 4002(b), Oct. 
21, 1998, 112 Stat. 2681-906.)


                            Prior Provisions

    A prior section 7491, act Aug. 16, 1954, ch. 736, 68A Stat. 893, 
placed the burden of proof in establishing the applicability of an 
exemption upon the defendant in the case of marihuana offenses, prior to 
repeal by Pub. L. 91-513, title III, Secs. 1101(b)(5)(A), 1103, 1105(a), 
Oct. 27, 1970, 84 Stat. 1292, 1294, 1295, effective on first day of 
seventh calendar month that begins after Oct. 26, 1970, with 
prosecutions commenced prior to such date not to be affected or abated 
by reason thereof.
    A prior section 7492, act Aug. 16, 1954, ch. 736, 68A Stat. 893, 
related to the enforceability of cotton futures contracts, prior to 
repeal by Pub. L. 94-455, title XIX, Sec. 1952(n)(4)(A), (o), Oct. 4, 
1976, 90 Stat. 1846, effective on the 90th day after Oct. 4, 1976.
    A prior section 7493, act Aug. 16, 1954, ch. 736, 68A Stat. 893, 
provided that no person whose evidence is deemed material by the officer 
prosecuting on behalf of the United States in any case brought under any 
provision of subchapter D of chapter 39 of this title withhold his 
testimony because of complicity by him in any violation of subchapter D 
of chapter 39 of this title or of any regulation made pursuant to such 
chapter, but that such person called by such officer who testifies in 
the case be exempt from prosecution for any offense to which his 
testimony relates, prior to repeal by Pub. L. 91-452, title II, 
Secs. 232, 260, Oct. 15, 1970, 84 Stat. 930, 931, effective on 60th day 
following Oct. 15, 1970, and not to affect any immunity to which any 
individual was entitled under by reason of any testimony given before 
60th day following Oct. 15, 1970. See section 6001 et seq. of Title 18, 
Crimes and Criminal Procedure.


                               Amendments

    1998--Subsec. (a)(2). Pub. L. 105-277 inserted concluding 
provisions.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-277 effective as if included in the 
provision of the Internal Revenue Service Restructuring and Reform Act 
of 1998, Pub. L. 105-206, to which such amendment relates, see section 
4002(k) of Pub. L. 105-277, set out as a note under section 1 of this 
title.


                             Effective Date

    Pub. L. 105-206, title III, Sec. 3001(c), July 22, 1998, 112 Stat. 
727, provided that:
    ``(1) In general.--The amendments made by this section [enacting 
this subchapter] shall apply to court proceedings arising in connection 
with examinations commencing after the date of the enactment of this Act 
[July 22, 1998].
    ``(2) Taxable periods or events after date of enactment.--In any 
case in which there is no examination, such amendments shall apply to 
court proceedings arising in connection with taxable periods or events 
beginning or occurring after such date of enactment.''
