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F. Whether Petitioners Are Liable for the Accuracy-Related
Penalty for the Years in Issue
In the alternative to fraud as to petitioner for 2000, and
with respect to petitioner for 1999 and 2001 and Susan Fairey for
1999-2001, respondent determined and contends that petitioners
are liable for the accuracy-related penalty under section 6662.
The Commissioner bears the burden of production with respect
to penalties and additions to tax. Sec. 7491(c). To meet the
burden of production, the Commissioner must produce evidence
showing that it is appropriate to impose the particular penalty
but need not introduce evidence of defenses such as reasonable
cause or substantial authority. Higbee v. Commissioner, 116 T.C.
438, 446 (2001); H. Conf. Rept. 105-599, at 241 (1998), 1998-3
C.B. 747, 995.
Respondent has met the burden of production for the
accuracy-related penalty under section 6662 because the record
establishes that petitioners deducted amounts for each year in
issue that they were not entitled to deduct and that petitioners
failed to produce, and thus we infer that they failed to keep,
records of claimed unreimbursed employee business expenses, and
travel and entertainment expenses.
Petitioners did not address this issue at trial or on
brief. We deem it conceded. See Levin v. Commissioner, 87 T.C.
698, 722-723 (1986), affd. 832 F.2d 403 (7th Cir. 1987);
Zimmerman v. Commissioner, 67 T.C. 94, 104 n.7 (1976). We
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