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making a profit. Considering the foregoing, we find that
petitioner was not involved in an event-planning trade or
business in 2002. Petitioner’s evidence also failed to show that
any of her expenditures were related to income-producing
activity. Accordingly, respondent’s disallowance of petitioner’s
2002 Schedule C deductions is sustained.
B. Section 6662 Accuracy-Related Penalty
With respect to the accuracy-related penalty under section
6662(a), the Commissioner has the burden of production. Sec.
7491(c). To prevail, the Commissioner must produce sufficient
evidence that it is appropriate to apply the penalty to the
taxpayer. Higbee v. Commissioner, 116 T.C. 438, 446 (2001).
Once the Commissioner meets his burden of production, the
taxpayer bears the burden of supplying sufficient evidence to
persuade the Court that the Commissioner’s determination is
incorrect. Id. at 447.
Section 6662(a) provides an accuracy-related penalty equal
to 20 percent of the underpayment required to be shown on a
return due to negligence or disregard of rules or regulations.
Sec. 6662(b)(1). For purposes of section 6662, the term
“negligence” includes “any failure to make a reasonable attempt
to comply with the provisions of * * * [the Code], and the term
‘disregard’ includes any careless, reckless, or intentional
disregard.” Sec. 6662(c). “Negligence” also includes any
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