- 33 -
expenses of maintaining his home as a trade or business expense
under sections 162(a) and 280A because he failed to substantiate
his entitlement to the claimed deductions.
Accuracy-Related Penalties Under Section 6662(a)
Section 6662(a) imposes a 20-percent penalty on the
underpayment of tax attributable to, among other things, the
taxpayer’s “negligence”, sec. 6662(b)(1), or “substantial
understatement of income tax”, sec. 6662(b)(2). Negligence is
defined to include the “failure to make a reasonable attempt to
comply” with the tax laws. Sec. 6662(c). A “substantial
understatement” is an understatement for the taxable year
exceeding the greater of 10 percent of the proper tax or $5,000.
Sec. 6662(d)(1)(A).
Section 7491(c) imposes on respondent the burden of
production of evidence that the section 6662(a) penalty is
appropriate, but respondent need not produce evidence regarding
reasonable cause. See Higbee v. Commissioner, 116 T.C. 438, 446-
447 (2001).
Petitioner reported Federal income tax liabilities of $2,465
for 1996 and $4,497 for 1997. On the basis of concessions made
thereafter and this Court’s rulings, petitioner’s tax liability
Page: Previous 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 NextLast modified: May 25, 2011