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shall bear the burden of proof with respect to factual issues
relating to the liability of the taxpayer for a tax imposed under
subtitle A or B of the Code.
Petitioner failed to appear and did not introduce any
evidence. Therefore, we conclude that the burden of proof
regarding the deficiency determined in the statutory notice of
deficiency is not placed on respondent pursuant to section
7491(a). Accordingly, we sustain respondent’s deficiency
determination contained in the statutory notice of deficiency.
Pursuant to Rule 142(a), respondent bears the burden of
proof with respect to the request for an increased deficiency.
Respondent submitted, and the Court received as evidence, Forms
W-2 and 1099 issued to petitioner. Additionally, as noted supra,
petitioner is deemed to have admitted certain facts supporting an
increased deficiency affirmatively alleged by respondent in the
answer. On the basis of the evidence, we sustain the increased
deficiency.
B. Section 6662(a)
Pursuant to section 6662(a), a taxpayer may be liable for a
penalty of 20 percent on the portion of an underpayment of tax
due to a substantial understatement of income tax. Sec. 6662(b).
An “understatement” is the difference between the amount of tax
required to be shown on the return and the amount of tax actually
shown on the return. Sec. 6662(d)(2)(A). A “substantial
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