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Accordingly, we do not sustain the determination that petitioner
is liable for the addition for failure to pay for 1995.
In court proceedings that arise in connection with
examinations commenced after July 22, 1998, the Commissioner
bears the burden of producing sufficient evidence to indicate
that it is appropriate to impose any additions to tax provided
for in the Internal Revenue Code. Sec. 7491(c), enacted by RRA
1998 sec. 3001, 112 Stat. 726; Higbee v. Commissioner, 116 T.C.
438, 446-447 (2001). Where no examination has been conducted,
the provisions of section 7491(c) apply to court proceedings that
arise in connection with taxable periods or events beginning or
occurring after July 22, 1998. RRA 1998 sec. 3001(c)(2), 112
Stat. 726. Once the Commissioner meets his burden of production
under section 7491(c), the taxpayer bears the burden of
establishing that a reasonable cause exception applies. Higbee
v. Commissioner, supra at 447.
Respondent claims that there was no “examination” of
petitioner’s 1995 and 1996 returns because those returns were
accepted as filed. Therefore, since petitioner’s 1995 and 1996
tax years began prior to July 22, 1998, respondent argues that he
does not bear the burden of production under section 7491(c).
4(...continued)
purposes of the addition to tax for failure to pay.
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