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Presumption of Correctness
IRS notices receive a “presumption of correctness” for a very good reason: without it, the IRS would lose every time. Here’s why: The rules of evidence require that testimony must be from personal, or “first-hand” knowledge. You as the petitioner are the only one involved in this procedure with the required first-hand knowledge. You are the only one who has personal knowledge of your financial affairs. The IRS has no first-hand knowledge of their “evidence” and generally relies entirely on hearsay. They also count on your not knowing this rule so that you won’t know to object to their evidence in court. Information the IRS gathers about you generally comes from third parties. Third party information is known as hearsay. It is generally not admissible as evidence. Bank records, credit card receipts, and information returns like 1099s and W-2s, are all hearsay, i.e., statements made out of court to prove the truth of something asserted in court. Only testimony from personal knowledge is admissible as evidence. No one at the IRS has personal, first-hand knowledge of your affairs; they only have forms and records provided by third-parties. Hearsay, not evidence. It’s why they need that presumption of correctness. On the other hand, your testimony, tax returns, and records are created from your knowledge of your own affairs. your own records and testimony.