- 17 - examination process and never supplied. Thus, petitioners have not shown compliance with section 7491(a)(2). Third, this Court has noted in earlier cases the potential impropriety of shifting the burden under section 7491(a) where the taxpayers did not raise the issue prior to the briefing process. E.g., Menard, Inc. v. Commissioner, T.C. Memo. 2004- 207; Estate of Aronson v. Commissioner, T.C. Memo. 2003-189. The rationale for this concern rests upon the possible prejudice to the Commissioner’s ability to introduce evidence specifically directed toward cooperation during the audit period. Menard, Inc. v. Commissioner, supra; Estate of Aronson v. Commissioner, supra. With respect to the accuracy-related penalty, the Commissioner satisfies the section 7491(c) burden of production by “[coming] forward with sufficient evidence indicating that it is appropriate to impose the relevant penalty” but “need not introduce evidence regarding reasonable cause, substantial authority, or similar provisions.” Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Rather, “it is the taxpayer’s responsibility to raise those issues.” Id. Because, as will be more fully detailed infra, respondent has introduced sufficient evidence to render the section 6662(a) penalty at least facially applicable, the burden rests on petitioners to show why it should not be applied.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011