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substantial understatement of income tax. Sec. 6662(a) and
(b)(1) and (2).
b. Burden of Production
In court proceedings arising in connection with examinations
beginning after July 22, 1998, section 7491(c) places on the
Commissioner the burden of producing evidence showing that it is
appropriate to impose the addition to tax under section 6653(a)
for 1987-88 and the accuracy-related penalty for negligence under
section 6662(a) for 1989-90 and 1992-97. As stated above at
paragraph A-1, the record does not show when the examination
began. If section 7491(c) applies, respondent has met the burden
of production for negligence by showing that petitioner
erroneously carried forward net operating losses (NOLs) from
years for which we decided in Allnutt I that he had substantial
income.
Petitioner contends that he prevails on this issue because
respondent offered no contrary evidence. We disagree.
Petitioner bears the burden of proof. See Rule 142(a).
c. Whether Petitioner Knew or Should Have Known Res
Judicata Barred Him From Carrying Forward NOLs
From 1981-86 to the Years in Issue
Respondent’s sole ground for contending that petitioner is
negligent under sections 6653(a) and 6662(a) is that he knew or
should have known that he could not carry forward NOLs from 1981-
86 to 1987-90 and 1992-97. Thus, for respondent to prevail on
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