26 U.S.C. § 7491 — Burden of proof

(a) Burden shifts where taxpayer produces credible evidence (1) General rule: If a taxpayer gives the court credible evidence on a factual question about their tax bill under subtitle A or B, the Secretary, not the taxpayer, must prove that issue. (2) Limitations: This only applies if (A) the taxpayer met the record-keeping requirements to back up each item, (B) the taxpayer kept all required records and cooperated with reasonable requests for witnesses, information, documents, meetings, and interviews, and (C) for a partnership, corporation, or trust, the taxpayer meets the description in section 7430(c)(4)(A)(ii). That size limit in (C) doesn't apply to certain revocable trusts tied to a decedent's estate, for a set period after the decedent's death. (3) Coordination: This rule doesn't apply if another part of the tax code already sets a specific burden of proof for that issue. (b) Use of statistical information on unrelated taxpayers: For an individual, the Secretary carries the burden of proof for any income item the Secretary reconstructed solely by using statistics about other, unrelated taxpayers. (c) Penalties: Regardless of any other rule, the Secretary carries the burden of production, meaning the Secretary must first come forward with evidence, in court for any penalty, addition to tax, or extra amount charged to an individual.