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Legal Memorandum: Burden of Proof for Tax Appeals in NY

Issue: Under New York law, who has the burden of proof before the Tribunal for Tax Appeals?

Area of Law: Tax Law
Keywords: Burden of proof before the Tribunal; Tax Appeals; Taxpayer
Jurisdiction: New York
Cited Cases: 479 N.Y.S.2d 889; 106 A.D.2d 761; 483 N.Y.S.2d 793
Cited Statutes: New York City Charter Ch. 7, § 170(d); Rules of Tribunal for Tax Appeals § 1-12
Date: 07/01/2006

  The general rule is that the party seeking redress with respect to an issue bears the burden of proof.  New York City Charter Ch. 7, § 170(d); Rules of Tribunal for Tax Appeals § 1-12.  Generally, when a taxpayer challenges a deficiency determination it is the taxpayer’s burden to demonstrate that the deficiency assessed was erroneous.  Silverman v. N.Y. State Tax Comm’n, 106 A.D.2d 761, 483 N.Y.S.2d 793, 794 (3d Dept. 1984); Matter of Atl. & Hudson Ltd. P’ship (State Tax Appeals Tribunal, Jan. 30, 1992).  The taxpayer may carry its burden by showing either that there was no “rational basis” in support of the determination or that it was not supported by “substantial evidence.”  Donahue v. Chu, 104 A.D.2d 523, 479 N.Y.S.2d 889, 891-92 (3d Dept. 1984).  In the absence of substantial evidence supporting a rational basis for a determination, the determination of a deficiency must be annulled.  Id. at 891.  A taxpayer can establish pertinent facts through credible testimony; the absence of records alone cannot preclude a taxpayer from meeting its burden of proof.  See In the Matter of Richter Mgmt. Servs., Inc., TAT (E) 93-281 (GC) (Feb. 2, 1996).

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