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Having described the framework of section 7491(c), we
evaluate whether respondent has met his burden of production with
regard to the section 6651(a)(1) addition to tax and the section
6662 accuracy-related penalty. We also discuss whether
petitioners have presented any evidence which would cause us not
to sustain respondent’s determinations with regard to the
addition to tax and the accuracy-related penalty.
Section 6651(a)(1) imposes an addition to tax for a
taxpayer’s failure to file a required return on or before the
specified filing date, including extensions. The amount of the
liability is based upon a percentage of the tax required to be
shown on the return. See sec. 6651(a)(1). The addition to tax
is inapplicable, however, if the taxpayer’s failure to file the
return was due to reasonable cause and not to willful neglect.
See sec. 6651(a)(1). Under section 7491(c), as noted above, the
Commissioner bears the burden of production with regard to
whether the section 6651(a)(1) addition to tax is appropriate,
but he does not bear the burden of proof with regard to the
“reasonable cause” exception of section 6651(a).
Respondent determined that petitioners are liable for a
section 6651(a)(1) addition to tax with regard to their 1996 tax
return. The parties have stipulated that petitioners filed their
1996 return on April 18, 1998, approximately 1 year after it was
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