Terry I. and Louise Major - Page 21

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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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