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purposes by any allowable credit for wage withholding, is less
than $500.8 Sec. 6654(e)(1). Second, the addition is not
applicable if the individual’s tax for the preceding taxable year
was zero. Sec. 6654(e)(2).
D. Section 7491(c)
Section 7491(c) imposes the burden of production in any
court proceeding (i.e., the burden of moving forward with
evidence) on the Commissioner with respect to the liability of
any individual for penalties and additions to tax.9 In order to
meet the burden of production under section 7491(c), the
Commissioner need only make a prima facie case that imposition of
the penalty or addition to tax is appropriate; he need not negate
the existence of any circumstantial defense such as reasonable
cause. Higbee v. Commissioner, 116 T.C. 438, 446 (2001); H.
Conf. Rept. 105-599, at 241 (1998), 1998-3 C.B. 747, 995.
Furthermore, section 7491(c) has no effect on the burden of proof
(i.e., the burden of persuasion), Higbee v. Commissioner, supra
at 446-447, which remains on petitioners in these cases, Rule
8 Effective for taxable years beginning after Dec. 31,
1997, the threshold amount is $1,000. Taxpayer Relief Act of
1997, Pub. L. 105-34, sec. 1202(a), 111 Stat. 994.
9 Sec. 7491(c) applies to court proceedings arising in
connection with examinations commencing after July 22, 1998.
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3001(c)(1), 112 Stat. 727. As referenced
in our findings of fact, the additions to tax not included in the
default motions (collectively, the remaining additions to tax)
pertain to examinations commenced after July 1998.
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