Brad and Teri Montagne - Page 11

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          784 F.2d 1006, 1009 (9th Cir. 1986).  We shall not painstakingly            
          address petitioners’ assertions “with somber reasoning and                  
          copious citation of precedent; to do so might suggest that these            
          arguments have some colorable merit.”  Crain v. Commissioner, 737           
          F.2d 1417, 1417 (5th Cir. 1984).                                            
          III. Penalty and Addition to Tax                                            
               Respondent has the burden of production under section                  
          7491(c) for the addition to tax and the penalty and must come               
          forward with sufficient evidence showing that they are                      
          appropriate.  See Higbee v. Commissioner, 116 T.C. 438, 446-447             
          (2001).  Once respondent has done so, the burden of proof is upon           
          petitioners to establish reasonable cause and good faith.  Id. at           
          449.                                                                        
               A.  Section 6662(a) Accuracy-Related Penalty                           
               Pursuant to section 6662(a), a taxpayer may be liable for a            
          penalty of 20 percent on the portion of an underpayment of tax              
          (1) attributable to a substantial understatement of tax or (2)              
          due to negligence or disregard of rules or regulations.  Sec.               
          6662(b).  The term “understatement” means the excess of the                 
          amount of tax required to be shown on a return over the amount of           
          tax imposed which is shown on the return, reduced by any rebate             
          (within the meaning of section 6211(b)(2)).  Sec. 6662(d)(2)(A).            
          An understatement is a “substantial understatement” when the                







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