Does the presumption of prima facie correctness apply if a tax assessment has no factual or legal basis?

Does the presumption of prima facie correctness apply if a tax assessment has no factual or legal basis?

• A. It depends
• B. Yes
• C. Only if a waiver exists
• D. No

Answer: (D)

The idea behind the presumption of prima facie correctness is that an assessment is treated as correct on its face because it’s based on the facts and the law. This presumption stands, but only if there is a factual and legal basis to support the assessment. If an assessment has no factual or legal basis, there’s nothing for the presumption to rely on. Without a basis in facts and the applicable law, there isn’t a prima facie case of correctness, so the presumption cannot apply. In that situation, the assessment would need to be reconsidered or corrected, and the taxpayer isn’t bound by a presumed correctness.

The idea behind the presumption of prima facie correctness is that an assessment is treated as correct on its face because it’s based on the facts and the law. This presumption stands, but only if there is a factual and legal basis to support the assessment. If an assessment has no factual or legal basis, there’s nothing for the presumption to rely on. Without a basis in facts and the applicable law, there isn’t a prima facie case of correctness, so the presumption cannot apply. In that situation, the assessment would need to be reconsidered or corrected, and the taxpayer isn’t bound by a presumed correctness.