Robin L. Greenhouse, told Bloomberg BNA June 19 that the parties had argued for different standards while agreeing that there should be a standard. The taxpayers argued for a pleadings standard, she said.
Kagan said circumstantial evidence can suffice to meet the taxpayer's burden, because “after all, direct evidence of another person's bad faith, at this threshold stage, will rarely if ever be available. And although bare assertion or conjecture is not enough, neither is a fleshed out case demanded.”
Ms. Greenhouse said the court adopted a standard like that in the Federal Rules of Civil Procedure Rule 8. “The type of evidence that must be presented is very favorable to the taxpayer. They can present circumstantial evidence that there was bad faith.”
“The government advocated a more difficult standard—like summary judgment where the party must show there is no issue of material fact,” Ms. Greenhouse said.... “Legal questions as to what counts as an illicit motive remain open. These will have to be decided before the Eleventh and potentially other circuits,” Ms. Greenhouse added. To read the full article click here