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IV. Additions to Tax
With respect to the examinations beginning after July 22,
1998, the Commissioner bears the burden of production in any
court proceeding involving an individual’s liability for
penalties or additions to tax. Sec. 7491(c). To meet this
burden, the Commissioner must come forward with sufficient
evidence indicating that it is appropriate to impose the relevant
penalty or addition to tax. Higbee v. Commissioner, 116 T.C.
438, 446 (2001). In instances where an exception to the penalty
or addition of tax is afforded upon a showing of reasonable
cause, the taxpayer bears the burden of showing such cause. Id.
at 447.
Section 6651(a) provides for a 5-percent addition to tax for
each month or portion thereof that the return is filed late, not
to exceed 25 percent in the aggregate, imposed upon a taxpayer
for failure to timely file a tax return, unless such failure to
file is due to reasonable cause and not due to willful neglect.
Although not defined in the Code, “reasonable cause” is viewed in
the applicable regulations as the “exercise of ordinary business
care and prudence”. Sec. 301.6651-1(c)(1), Proced. & Admin.
Regs; see also United States v. Boyle, 469 U.S. 241, 246 (1985).
“Willful neglect” can be interpreted as a “conscious, intentional
failure or reckless indifference.” United States v. Boyle, supra
at 245. With respect to section 6651(a) additions to tax,
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