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the section 6651(a)(2) addition to tax cannot be sustained. Watt
v. Commissioner, T.C. Memo. 1986-22.5
In the notice of deficiency, respondent applied section
6651(c)(1), which limits the addition under section 6651(a)(1) by
the amount of the addition under section 6651(a)(2) for any month
to which an addition applies under both of those provisions.
Since we have found that the additions to tax under section
6651(a)(2) are inapplicable, the additions to tax under section
6651(a)(1) should not have been adjusted.
D. Section 6654 Addition to Tax for Failure To Pay Estimated Tax
Section 6654(a) provides for an addition to tax in the case
of any underpayment of estimated tax.6 Section 6654(a) does not
4(...continued)
the Commissioner under sec. 6020(b) is treated as a return filed
by the taxpayer for returns due after July 30, 1996, for purposes
of sec. 6651(a)(2)”). The evidence in the instant case does not
show that a substitute return was filed for the years at issue.
Respondent stated in his trial memorandum that the examination in
this case began on Sept. 5, 2000. Since the examination began
after July 22, 1998, sec. 7491(c) applies and places the burden
of production with respect to additions to tax upon respondent.
5The additions to tax under secs. 6651(a)(1) and (2) apply
to different amounts: Sec. 6651(a)(1) applies to amounts
required to be shown on a return, whereas sec. 6651(a)(2) applies
to the amount actually shown on a return which remains unpaid.
See Estate of Rauhoff v. Commissioner, T.C. Memo. 1982-494; sec.
301.6651-1(f), Example (1), Proced. & Admin. Regs. Congress
recognized this in enacting sec. 6651(g) and in providing two
different standards under subsections (a)(1) and (2) of sec.
6651.
6We have jurisdiction over the sec. 6654(a) additions to tax
in this case because income tax returns were not filed for the
(continued...)
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