Rodney L. Burr - Page 16




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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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