- 9 -
We do not consider that settlement here. See Fed. R. Evid. 408.
Petitioners also contend that they have paid more tax than their
coworkers, that respondent unreasonably refused to settle this
case, and that respondent has harassed them. Petitioners state
no details to support these claims, and we do not consider them
further.
4. Conclusion
We conclude that petitioners must include in income the
$69,500 that petitioner withdrew from his IRA in 1996.
B. Whether Petitioners Are Liable for the Accuracy-Related
Penalty
Respondent concedes that respondent bears the burden of
production relating to petitioners’ liability under section
6662(a). Sec. 7491(c). The Commissioner satisfies the burden of
production with respect to the accuracy-related penalty under
section 6662 by coming forward with sufficient evidence
indicating that it is appropriate to impose the relevant penalty;
the Commissioner need not introduce evidence regarding reasonable
cause, substantial authority, or similar provisions. Higbee v.
Commissioner, 116 T.C. 438, 446 (2001); see H. Conf. Rept. 105-
599, at 241 (1998), 1998-3 C.B. 747, 995.
A substantial understatement of tax exists if the amount of
the understatement is more than 10 percent of the correct amount
of tax or $5,000. Sec. 6662(d)(1)(A). Petitioners reported tax
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