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The boat appraiser, a disinterested third party who provided
appraisals for The Salvation Army, inspected the boat and offered
a detail description of the boat’s condition. After his
inspection, the boat appraiser valued the boat at $500. After
the appraisal, the boat was subsequently sold by The Salvation
Army for $500.
The record does not establish that the value of the boat was
greater than $500 at the time contributed by petitioners to The
Salvation Army. Accordingly, we hold that petitioners are not
entitled to a charitable deduction with respect to the boat in
excess of the amount allowed by respondent.
B. Section 6662(a)5
The last issue for decision is whether petitioners are
liable for an accuracy-related penalty pursuant to section
6662(a) for the year in issue. Section 6662(a) and (b)(1)
provides that if any portion of an underpayment of tax is
attributable to negligence or disregard of rules or regulations,
then there shall be added to the tax an amount equal to 20
percent of the amount of the underpayment that is so
5 Respondent has satisfied his burden of production under
sec. 7491(c) with respect to the accuracy-related penalty under
sec. 6662(a) and (b)(1). Sec. 7491(c); Rule 142(a); Higbee v.
Commissioner, 116 T.C. 438, 446-447 (2001). Accordingly,
petitioners bear the burden of proving that the penalty is
inapplicable. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503
U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933);
Higbee v. Commissioner, supra.
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