- 9 -
Respondent satisfied his burden of production under section
7491(a)(1) because the record shows that petitioner substantially
understated his income tax for 2000. See sec. 6662(d)(1)(A)(ii);
Higbee v. Commissioner, supra at 442. Accordingly, petitioner
bears the burden of proving that the accuracy-related penalty
should not be imposed with respect to any portion of the
understatement for which he acted with reasonable cause and in
good faith. See sec. 6664(c)(1); Higbee v. Commissioner, supra
at 446.
Respondent argues that petitioner is liable for the
accuracy-related penalty because petitioner failed to make
reasonable attempts to obtain the pertinent information to report
the income from the education accounts, and that petitioner did
not have reasonable cause nor did he act in good faith with
respect to the understatement. In contrast, petitioner contends
that “he did everything to try to file the appropriate tax, but
never received the Forms 1099”.
Although this is a close case, the totality of the facts and
circumstances leads us to conclude that petitioner had reasonable
cause for the understatement and that he acted in good faith with
respect to such understatement.
We note at the outset that we found petitioner to be a very
conscientious taxpayer. In preparing to file his 2000 return,
petitioner made concerted efforts to obtain any statements and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011