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evidence indicating that it is appropriate to impose the relevant
penalty or addition to tax. Higbee v. Commissioner, 116 T.C.
438, 446 (2001). Once the Commissioner meets his burden of
production, the taxpayer must come forward with evidence
sufficient to persuade a court that the Commissioner’s
determination is incorrect. Id. at 447. The taxpayer also bears
the burden of proof with regard to issues of reasonable cause,
substantial authority, or similar provisions. Id. at 446.
Respondent determined that petitioner is liable for the
accuracy-related penalty under section 6662(a) for 2000. The
accuracy-related penalty is equal to 20 percent of any portion of
an underpayment of tax required to be shown on the return that is
attributable to the taxpayer’s negligence or disregard of rules
or regulations. See sec. 6662(a) and (b)(1). “Negligence”
consists of any failure to make a reasonable attempt to comply
with the provisions of the Internal Revenue Code. Sec. 6662(c).
“Disregard” consists of any careless, reckless, or intentional
disregard. Id.
An exception applies to the accuracy-related penalty when
the taxpayer demonstrates (1) there was reasonable cause for the
underpayment, and (2) the taxpayer acted in good faith with
respect to such underpayment. See sec. 6664(c). Whether the
taxpayer acted with reasonable cause and in good faith is
determined by the relevant facts and circumstances. The most
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Last modified: May 25, 2011