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made by petitioner is subject to the additional 10-percent tax
under section 72(t)(1).
Accuracy-Related Penalty
In the notice of deficiency, respondent imposed an accuracy-
related penalty due to substantial understatement of tax under
section 6662(a).
Section 6662(a) imposes a penalty in the amount of 20
percent on the portion of the underpayment to which the section
applies. As relevant to this case, the penalty applies to any
portion of the underpayment that is attributable to any
substantial understatement of income tax. Sec. 6662(b)(2).
There is a “substantial understatement of income tax” if the
amount of the understatement exceeds 10 percent of the tax
required to be shown on the tax return or $5,000. Sec.
6662(d)(1).
Section 7491(c) requires the Commissioner to carry the
burden of production because he seeks to impose the penalty.
Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Once the
2(...continued)
applicable to this case. The resolution of this issue does not
depend on which party has the burden of proof.
Further, we note that petitioner did not argue, and we do
not conclude, in any event, that petitioner used the distribution
for a first home purchase, as defined by sec. 72(t)(2)(F).
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Last modified: May 25, 2011