- 10 -
received on account of any physical injury or physical sickness.
Accordingly, the $58,000 amount is not excludable under section
104(a)(2).
2. Accuracy-Related Penalty
We turn now to the determination in the notice that
petitioner is liable for the year at issue for the accuracy-
related penalty under section 6662(a). Respondent has the burden
of production under section 7491(c) and must come forward with
sufficient evidence that it is appropriate to impose the penalty.
See Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001).
Respondent determined that petitioner is liable for the
accuracy-related penalty for a substantial understatement of
income tax under section 6662(b)(2). There is a substantial
understatement of income tax if the amount of the understatement
exceeds the greater of either 10 percent of the tax required to
be shown on the return, or $5,000. Sec. 6662(d)(1)(A).
Respondent has met his burden of production with respect to
the accuracy-related penalty. Petitioner reported taxable income
of $42,300 and Federal income tax of $6,794. Respondent
determined petitioner’s taxable income was $98,231 and that
petitioner had an income tax deficiency of $20,511. After
considering respondent’s concessions, we are satisfied that
petitioner substantially understated the income tax required to
be shown on her return for the year at issue.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011