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not state any reason why petitioners did not include the
distribution in their gross income in taxable year 1999, and
petitioner does not claim any exception applies to this
distribution. Therefore, we conclude that the $1,493
distribution from Bank One to Ella Joseph is income to
petitioners, and we sustain respondent’s inclusion of this amount
in petitioners’ gross income.
6. Accuracy-Related Penalty
As stated previously, respondent determined that petitioners
are liable for an accuracy-related penalty pursuant to section
6662(a) with respect to petitioners’ disallowed deductions and
unreported income.
Section 7491(c) provides that the Commissioner shall have
the burden of production in any court proceeding with respect to
the liability of any individual for any penalty, addition to tax,
or additional amount. Specifically, section 7491(c), which was
enacted by the Internal Revenue Service Restructuring and Reform
Act of 1998 (RRA 1998), Pub. L. 105-206, sec. 3001(a), 112 Stat.
726, provides:
SEC. 7491(c). Penalties.--Notwithstanding any
other provision of this title, the Secretary shall have
the burden of production in any court proceeding with
respect to the liability of any individual for any
penalty, addition to tax, or additional amount imposed
by this title.
Section 7491(c) is effective with respect to court
proceedings arising in connection with examinations commencing
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