-- Posted by Neil H. Buchanan
Two weeks ago, in a Dorf on Law post,
I discussed "a small example, with larger implications" of some truly
sloppy work by a highly regarded journalist (the White House correspondent
for NBC News), who mindlessly took a quote out of context, regarding the
ACA supposedly being a "train wreck" waiting to happen. It was a shameful moment, but hardly the
worst that we have seen from our free press recently.
I am by no means, of course. the only person who has been disappointed, and sometimes stunned,
by the disastrously low standards of the current media culture in this
country. It is even worse when one sees such incompetence
first hand. Last summer, for example, I described
the completely predictable media circus that surrounded the release of
the Supreme Court's decision in the ACA case. I was asked by a media
outlet to be one of the idiots standing on the Court's steps, reading
the decision in real time and shouting at the camera as I was
reading. I declined.
Another such example, perhaps
even more disturbing, occurred a few weeks ago. During the first day
of my "Basics of U.S. Federal Income Taxation" course, which I was
teaching to a group of Austrian students, I explained the legal
standards for the burden of proof in tax cases under the Internal
Not ten minutes after the class ended, I received an
email from a reporter for PolitiFact, one of the self-appointed fact-checking
groups of reporters in the U.S. It seemed that a 7th-term Republican Congressman from Georgia, Randy Forbes, had gone on Fox News and said,
"The IRS doesn't have to prove something against you. They can walk in
and you've got the burden of proof." The reporter wanted to know if
this was true or false. I replied, in part:
"Rep. Forbes is completely wrong. Sec. 7491(a)(1) of the
Internal Revenue Code clearly places the burden of proof on the
government, not the taxpayer, when the taxpayer produces evidence that
would allow a court to make a legal determination: '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
[of the Treasury]
shall have the burden of proof with respect to such issue.'"
PolitiFact has a spotty record, at best, in its assumed role as the
nation's arbiter of truth and lies. Almost every one of their analyses
that has crossed into areas with which I have any familiarity has been
wrong. The group even declared a true statement by President Obama in
2012 not only false, but they awarded it their "lie of the year" award,
which strikes me
as a jump-the-shark moment for any journalistic operation, much less
one that is specifically trying to separate facts from falsehoods.
Be that as it may, the burden-of-proof issue is a crystal-clear example of a legal question for which
there is simply a right answer. The congressman says the taxpayer has
the burden of proof. The law says the government has the burden of
proof. The congressman's statement is false.
credit, PolitiFact does recognize that some statements have nuances that
make it more difficult to call them simply true or false. Context matters,
words can have multiple meanings, and so on. PolitiFact's reports,
therefore, do not merely label every statement as "true" or "false," but
sometimes "mostly false," "pants on fire," and so on.
reasons that I will explain in a moment, I would have been unsurprised
if the report on Forbes's false claim had concluded that he was "Perhaps
Understandably Wrong," even though it is absolutely
correct to call his statement simply "False." How did PolitiFact actually
describe his statement? "Mostly true"!
As the kids say: wtf?! This conclusion is actually even worse, because the only
reason they added "mostly" to their verdict is that they discovered that
criminal tax cases place the usual "guilty beyond a reasonable doubt"
burden on the prosecution, which is true but irrelevant to the inquiry.
other words, for non-criminal tax cases, PolitiFact declared that Forbes's
false statement was true. How could they reach that completely incorrect conclusion? This
is where I would have been willing to say that the congressman's statement was
"perhaps understandably wrong." In the statutory language that I quoted, the (extremely clear) declaration that the government bears the
burden of proof is preceded by the requirement that "a taxpayer introduce
with respect to any factual issue relevant to ascertaining the liability
of the taxpayer for any tax imposed."
What does that mean? In my email to the reporter, I explained: "This
means that the 'burden of production' remains on the taxpayer to produce
evidence, but that's exactly as any sensible person should want it: If
the IRS had the burden to produce evidence, it would have to be given
access to individuals' private files, in order to find that evidence.
Is that what we really would want the IRS to be doing? The taxpayer
usually possesses evidence of donations, expenditures, and so on. If
they want to claim that, say, they donated $25,000 to a charity, they
can surely produce a canceled check to support that assertion."
was happy to see that the PolitiFact piece quoted my rhetorical
question from that email ("Is that what ... ?"), but they still completely
missed the point. They seem to have been thrown off by a statement from
an IRS webpage
(from the small business and self-employed taxpayers section of its website), which incorrectly uses the term "burden of proof" to describe both the burden to produce evidence and the burden to prove the legal issue in
court. As I explained in my email to the reporter:
"[W]hen the IRS says (from your email), 'The responsibility to
prove entries, deductions, and statements made on
your tax returns is known as the burden of proof. You must be able to
prove (substantiate) certain elements of expenses to deduct them,'
they're apparently trying not to confuse non-lawyer citizens with the
difference between 'burden of proof' and 'burden of production.' Having
the 'responsibility to prove entries, deductions, and statements' is
simply to say that you, the taxpayer, have to show up in court and show
your evidence that backs up what you say."
Think about the reaction if the IRS included on its public pages a legal distinction between production of evidence and proving points of law. Congressman Forbes would surely say something like, "How is a regular person supposed to understand that?! This is why people hate the IRS!"
Even so, it is true that one of the IRS's web pages does conflate the two concepts, which is why I think one could call Forbes's statement "understandably wrong." (Why a statement on the "Small Business and Self-Employed" section of the website should be viewed as definitive for every taxpayer is another matter, but I will let that go for now.)
Nevertheless, PolitiFact then completely garbles the analysis by saying: "In other
words, the IRS is presumed to be correct unless the taxpayer 'produces
"credible evidence"' to counter the agency’s finding. ... So, for the most common interactions with the IRS, the burden of proof is indeed on the taxpayer."
No, that is not what it says "in other words." The production of evidence is a matter of supporting an affirmative statement on the part of the taxpayer, not a matter of "counter[ing] the agency's finding." The agency has not "found" anything that the taxpayer must disprove. The taxpayer is making an affirmative claim about a fact of the world that (she hopes) will allow her to reduce her tax bill.
For example, suppose that there are two taxpayers whose employers have correctly reported that their respective salaries are both $80,000. One taxpayer then says, "But I don't have to pay taxes on that income, because I gave it all away to a charity. So the other guy should pay taxes, and I shouldn't." At that point, the taxpayer would be legally obligated to produce credible evidence demonstrating that he has, indeed, given $80,000 to a charity. Doing so would involve demonstrating that the charity is a legitimate charity, donations to which are tax deductible. (There will also be legal analyses regarding annual limits on the total charitable deductions that Congress allows under the tax laws, and other issues.)
The point is that the taxpayer's requirement to produce evidence is not a "presumption of guilt," or "forcing the taxpayer to counter the agency's finding," or anything like that. It is a requirement that, when a taxpayer claims that her tax computation should be based on certain facts, she must be able to produce evidence to support those factual claims. The IRS is not presumed to be correct, because it is not making any claim other than, "Unless the facts are otherwise, this is your tax liability." And the taxpayer has the ability to bring those additional facts to light.
PolitiFact dismisses as a mere technicality the production/proof distinction, and then claims that, for "the most common interactions with the IRS," Forbes's statement is correct. But how do they get around the clear language from Section 7491, that "the Secretary
[of the Treasury]
shall have the burden of proof," even in (as PolitiFact describes it) "the most common interactions with the IRS"? The article quotes a tax litigator as saying: "Nothing the congressman said on the burden of proof would strike me as
outside of the norm or the general rule if I or any other tax litigator
heard it in everyday conversation."
So, even though the law is absolutely clear that the burden of proof is on the government, PolitiFact is satisfied that this is not true, because one lawyer told them that tax litigators often hear people make the same mistake?
This, it seems to me, perfectly captures -- and then takes to a surreal level -- the modern media's obsession with a perverse notion of "balance": If you can find two people who disagree about something, simply report it as he-said-he-said. Anything else is "biased reporting." Critics of the media have joked that this will surely lead one day to absurdities like this: "Scientists say that the sun rises in the East. Others say no. The debate has not been resolved." We now have something even worse: "The law clearly says X. One lawyer tells us that some people say not-X. So those people are right."
Here, as I stated above, one could acknowledge that it is easy to become confused about the meaning of the burden of proof, and conclude that this is not a "pants on fire" lie from a Congressman. It is surely interesting that even some tax lawyers are sloppy in their language (or, more accurately, hear such sloppiness often enough that it is no longer remarkable). But, we actually have a fact staring us in the face -- and PolitiFact is a fact-checking organization! (Note, among other things, the organization's name.)
And just as clearly, we know for sure that taxpayers do not have to disprove any assertions by the government, but must only support their own assertions of fact. That is not just a technical statement of the law, but a description of a system that respects taxpayer/citizens' presumption of innocence.
This, like the "train wreck" comment about the ACA, is not an error by the media that will alone change history. Still, it is especially depressing to see that a fact-checking organization -- even when directly supplied with the most relevant fact -- does not even bother to report the facts as they stand, and instead invents its own notion of what happens "most commonly" on the ground. A statement cannot be "true" -- mostly or otherwise -- if it is false. And Forbes's statement is false. Perhaps understandably false, but false. And our media watchdogs (seemingly deliberately) missed another one.