Daniel F. Monte - Page 10

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               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              






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