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understatement and acted in good faith. Sec. 6664(c)(1); sec.
1.6664-4(a), Income Tax Regs.
Respondent bears the burden of production with respect to
petitioner’s liability for the accuracy-related penalty under
section 6662(c) because the examination in this case commenced
after July 22, 1998, the effective date of section 7491.
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. Petitioner
erroneously failed to include in his gross income the $1,568,087
qui tam payment. Thus, respondent has met the burden of
production. H. Conf. Rept. 105-599, at 241 (1998), 1998-3 C.B.
747, 995.
2. Petitioner’s Contentions
Petitioner contends that he made a good faith and reasonable
effort to assess his proper tax liability by discussing it with
Mrs. Roco and researching tax cases, the Internal Revenue Code,
IRS regulations, tax publications, and tax treatises to determine
whether the qui tam payment was includable in gross income for
Federal income tax purposes. He also contends that his failure
to report the qui tam payment on his 1997 return was reasonable
because he expected respondent to audit his 1997 return after
respondent matched the Form 1099-MISC with his return and
discovered that he had not reported the $1,568,087 payment. We
disagree.
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