-265-
and 1998 partnership tax returns in the $974 million in
receivables, the $79 million receivable, and SMP’s membership
interest in Corona. In the alternative, respondent determined
that the section 6662(a) 20-percent penalty for negligence,
disregard of rules or regulations, or substantial understatement
applies to the underpayments that result from these adjustments.
With respect to Corona, respondent argues that the section
6662(h) 40-percent accuracy-related penalty for gross valuation
misstatements applies to the underpayment that results from an
adjustment to the tax basis that Corona reported on its 1997
partnership tax return in the $79 million receivable. In the
alternative, respondent argues that the section 6662(a) 20-
percent accuracy-related penalty for negligence, disregard of
rules or regulations, or substantial understatement applies to
the underpayment that results from this adjustment.
A. Burden of Production
Section 7491(c) provides that the Commissioner shall have
the burden of production in any court proceeding with respect to
the liability of any “individual” for any penalty, addition to
tax, or additional amount imposed by the Code. Presumably on the
basis of this provision, petitioner argues that “Respondent bears
the burden of showing that Petitioners are liable for any
penalties.” We disagree.
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