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made to petitioner in 2000. The documentary evidence establishes
that Dynamex paid petitioner $29,490.83 in nonemployee
compensation in 2000. Petitioner’s claim that he did not receive
this income is without merit. Accordingly, we sustain
respondent’s deficiency determination.
II. Section 6662 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
due to negligence or disregard of rules or regulations or a
substantial understatement of income tax. Sec. 6662(b). An
“understatement” is the difference between the amount of tax
required to be shown on the return and the amount of tax actually
shown on the return. Sec. 6662(d)(2)(A). A “substantial
understatement” exists if the understatement exceeds the greater
of (1) 10 percent of the tax required to be shown on the return
for a taxable year or (2) $5,000. See sec. 6662(d)(1).
Section 7491(c) provides that the Commissioner shall bear
the burden of production with respect to the liability of any
individual for penalties. The Commissioner, however, does not
have the obligation to introduce evidence regarding reasonable
cause or substantial authority. Higbee v. Commissioner, 116 T.C.
438, 446 (2001). The evidence establishes that petitioner’s
understatement for 2000 exceeds the greater of 10 percent of the
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