- 11 -
6662(a) of the Code. Weir should not be liable for
these penalties, since she had reasonable cause for
relying on the language of the Separation Agreement
showing that her ex-husband was awarded all interest in
the military retirement benefits and she merely
received settlement payments from him and that it was
not due to willful neglect.
C. Burden of Proof
There is some question here as to who bears the burden of
proof with respect to the additions to tax and penalty. Section
7491(c) provides: “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 burden imposed by section 7491(c) is only to
come forward with evidence regarding the appropriateness of
applying a particular addition to tax or penalty to the taxpayer.
Respondent need not negate all defenses to the additions or
penalties. See Higbee v. Commissioner, 116 T.C. , (2001).
Section 7491 is effective for court proceedings arising in
connection with examinations commencing after July 22, 1998. See
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3001, 112 Stat. 726. The notice is dated
January 22, 1999. The parties have not informed us whether the
examination commenced on or before July 22, 1998. Respondent
assumes that petitioner bears the burden of proof, and petitioner
does not address the issue. Whether section 7491(c) applies or
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011