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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 farm
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