- 8 -
D. Whether Petitioners May Deduct Partnership Losses of $32,065
for 2001
Petitioners contend that they may deduct partnership losses
of $32,065 for 2001. We disagree. There is no evidence to
support petitioners’ partnership loss deduction for 2001.
E. Whether Petitioners Are Liable for the Accuracy-Related
Penalty
Section 7491(c) places on the Commissioner the burden of
producing evidence that it is appropriate to impose additions to
tax. To meet this burden, the Commissioner must produce evidence
showing that it is appropriate to impose the particular addition
to tax but need not produce evidence relating to 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.
Petitioners failed to keep records and substantiate their
deductions. Petitioners offered no evidence to show that they
are entitled to NOLs or partnership losses or other claimed
deductions. Thus, respondent has met the burden of production,
and petitioners are liable for the accuracy-related penalty for
2000 and 2001.
F. Penalty for Frivolous Positions or Instituting Proceedings
Primarily for Delay Under Section 6673
Respondent moved at trial to impose a penalty under section
6673. The Court may impose a penalty of up to $25,000 if the
position or positions asserted by the taxpayer in the case are
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011