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Petitioner alleged nontaxable sources of income of $1,600
for 1996 and $14,300 for 1997, but he did not dispute that he had
a substantial amount of unreported income in those years; in
effect, petitioner conceded that he had unreported income of
$62,508 for 1996 and $7,642 for 1997. In addition, petitioner
did not produce to respondent’s agent during the audit adequate
substantiation of the items in dispute. A taxpayer’s failure to
properly substantiate items is evidence of negligence. See sec.
6662(c); Higbee v. Commissioner, supra at 449; sec. 1.6662-
3(b)(1), Income Tax Regs. These facts are sufficient to meet
respondent’s burden of production under section 7491(c) relating
to petitioner’s liability for the accuracy-related penalty.
The accuracy-related penalty under section 6662(a) does not
apply to any part of an underpayment if the taxpayer shows that
there was reasonable cause for that part of the underpayment, and
that the taxpayer acted in good faith in view of the facts and
circumstances. Sec. 6664(c)(1). The taxpayer bears the burden
of proving that the failure is due to reasonable cause and not
willful neglect. Higbee v. Commissioner, supra at 446.
Petitioner contends that he is not liable for the accuracy-
related penalty. However, he offered no evidence to support his
contention. Petitioner suggests that he and Warren had a bad
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