Legal Definitions - leads doctrine

The leads doctrine is a rule in tax law that requires the government to investigate all leads that could prove a taxpayer's innocence in a tax-evasion case. If the government fails to investigate these leads, the trial judge may presume that they are true and exonerating.

For example, suppose a taxpayer is accused of underreporting their income. The taxpayer provides the government with evidence that they received a large gift from a family member during the year in question. If the government fails to investigate this lead and instead relies solely on the evidence of underreporting, the trial judge may presume that the gift was indeed received and exonerate the taxpayer.

The leads doctrine ensures that the government thoroughly investigates all possible evidence before making a case against a taxpayer. This helps to prevent wrongful convictions and ensures that justice is served fairly.