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An individual must first challenge a penalty by filing a petition
alleging some error in the determination of the penalty. If the
individual challenges a penalty in that manner, the challenge
generally will succeed unless the Commissioner produces evidence
that the penalty is appropriate. If an individual does not
challenge a penalty by assigning error to it (and is, therefore,
deemed to concede the penalty), the Commissioner need not plead
the penalty and has no obligation under section 7491(c) to
produce evidence that the penalty is appropriate.
We have disposed of petitioner’s affirmative defense for
1996. The only issue before us with respect to the penalties is
a legal issue: whether, by having failed to assign error to
respondent’s determinations of penalties (or averring facts
tending to show error in respondent’s basis for the penalties),
petitioner has conceded those penalties. The answer is yes.
Rule 34(b). Respondent is entitled to summary adjudication with
respect to the penalties in question, and we shall enter decision
for respondent that petitioner is liable for penalties under
section 6662(a) of $16,561, $13,762, and $11,842, for 1996, 1997,
and 1998, respectively.
An appropriate order and
decision will be entered.
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Last modified: May 25, 2011