Lawrence v. C.I.R., 2012 U.S. App. LEXIS 5815 (11th Cir. 2012)
Lawrence argued that the IRS account transcripts, which indicated that the taxpayer had no adjusted gross income for three tax years, constituted credible evidence sufficient to shift the burden of proof to the IRS. However, the Commissioner was prohibited legally from assessing a deficiency against the taxpayer until after the tax court issued a final decision, under 26 U.S.C.S. § 6213(a). Thus, the Court found that the fact that the disputed deficiencies were omitted from the account transcripts was not pertinent to the issue of the taxpayer's tax liability.
The court found that because Lawrence failed to introduce credible evidence about his tax liability, he retained the burden of proof under 26 U.S.C.S. § 7491(a). Lawrence was entitled to retirement benefits under his former employer's pension plan and under social security during the three tax years. That those payments were made directly to the IRS as a result of the taxpayer's IRS levy was immaterial to the issue of whether they constituted taxable income. Pension and social security benefits were generally considered "gross income" for purposes of federal income tax, under 26 U.S.C.S. §§ 61(a)(11) and 86(a).
The court decision was affirmed.
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