The impact of the burden of proof on state tax appeals cannot be overstated. Taxpayers often lose tax appeals on the basis that they failed to satisfy the seemingly elusive burden of proof. Apart from limited instances in the arena of alternative apportionment, taxpayers bear the burden of proof in nearly every state tax appeal. As the reasoning goes, taxpayers should bear the burden of proof because it is the taxpayers that possess the necessary information and, thus, are in the best position to establish the proper amount of state tax liability. But should this always be the case?
In an article originally published in the Journal of Multistate Taxation and Incentives, Zach Gladney and Charles Wakefield explore three instances where the burden of proof should not be borne by the taxpayer.
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