- 19 - faith. See secs. 6662(d)(2)(B)(i) and (ii), 6664(c)(1); sec. 1.6664-4(c), Income Tax Regs. 2. Burden of Production and Burden of Proof Section 7491(c) provides as follows: SEC. 7491(c). Penalties.--Notwithstanding any other provision of this title, the Secretary shall have the burden of production in any court proceeding with respect to the liability of any individual for any penalty, addition to tax, or additional amount imposed by this title. The Commissioner must come forward with evidence that it is appropriate to apply a particular penalty against the taxpayer before the Court can impose the penalty; however, to meet the burden of production, the Commissioner need not introduce evidence relating to reasonable cause or substantial authority. Higbee v. Commissioner, 116 T.C. 438, 446 (2001); S. Rept. 105- 174, at 46 (1998), 1998-3 C.B. 537, 582. Instead, the burden remains on the taxpayer to raise and prove that he or she is not liable for the penalty because of reasonable cause or substantial authority. Higbee v. Commissioner, supra; see S. Rept. 105-174, supra at 46, 1998-3 C.B. at 582. 3. Whether Petitioners Are Liable for the Accuracy-Related Penalty Petitioner is an accountant and lawyer who is familiar with section 183 and the regulations. Despite this, he deducted farmPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011