- 5 -
an addition to tax of 5 percent of the tax due for each month or
partial month of the delinquency, not to exceed 25 percent,
“unless it is shown that such failure is due to reasonable cause
and not due to willful neglect”. Since both returns were filed
more than 5 months after the due date, the maximum penalty of 25
percent would apply, unless the delay was the result of
“reasonable cause” and not “willful neglect”.
Petitioner bears the burden of proving that the delay
resulted from “reasonable cause” and not “willful neglect” where
the addition to tax was determined in the notice of deficiency,
as it was here.3 Rule 142(a); Bebb v. Commissioner, 36 T.C. 170,
173 (1961); Comey v. Commissioner, T.C. Memo. 2001-275; Smith v.
Commissioner, T.C. Memo. 1984-114; Dritz v. Commissioner, T.C.
Memo. 1969-175, affd. 427 F.2d 1176 (5th Cir. 1970); see also
Welch v. Helvering, 290 U.S. 111 (1933) (presumption of
correctness given to Commissioner’s determinations in notice of
deficiency).
Petitioner offered no evidence to meet his burden of proof.
Indeed, the only relevant testimony concerning this issue was
3In 1998, Congress enacted sec. 7491(c), which places the
burden of production on the Secretary in connection with any
determination of penalties or additions to tax. Sec. 7491(c)
applies only to court proceedings arising in connection with
examinations commenced after July 22, 1998. Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3001, 112 Stat. 726. The notice of deficiency in this case
was issued on Feb. 26, 1997, which conclusively establishes that
the examination was commenced before July 22, 1998.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011