Eugene A. Sanders - Page 9

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          were subsequently disallowed partnership deductions which totaled           
          $3,055,313.  The petition filed at docket No. 7714-96 by the tax            
          matters partner in response to the FPAA issued to Durham for the            
          taxable year 1991 was untimely.  Accordingly, the case was                  
          dismissed, and by an assessment made in September 1996,                     
          respondent increased petitioner’s 1991 Federal income tax                   
          liability by $42,057.  In a notice of deficiency dated September            
          9, 1996, respondent determined that petitioner is liable for a              
          section 6662(a) accuracy-related penalty of $8,411 for 1991.9               
               Respondent determined that petitioner is liable for the                
          accuracy-related penalty under section 6662(a) because of                   
          negligence or disregard of rules or regulations under section               
          6662(b)(1) or, in the alternative, a substantial understatement             
          of income tax under section 6662(b)(2).  Respondent’s                       
          determination with respect to the imposition of the section                 
          6662(a) penalty is presumed correct, and petitioner bears the               
          burden of proving that he is not liable for the accuracy-related            
          penalty under section 6662(a).10  See Rule 142(a); Welch v.                 

               9  Respondent concedes that a portion of the partnership               
          adjustment is not subject to the accuracy-related penalty.                  
               10  Sec. 7491 is not applicable in this case because the               
          examination of petitioner’s 1991 return commenced before July 22,           
          1998, the effective date of sec. 7491.                                      

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