Diana Cote - Page 7

          Petitioner does not qualify for any exception to the 10-percent             
          additional tax on the remaining $308,622 and is thus liable for             
          the additional tax on this amount.                                          
          3.   Addition to Tax Under Section 6651(a)(1)                               
               Section 6651(a)(1) imposes an addition to tax for failure to           
          file a return when due “unless it is shown that such failure is             
          due to reasonable cause and not due to willful neglect”.  The               
          addition equals 5 percent for each month that the return is late,           
          not to exceed 25 percent in total.  The Commissioner has the                
          burden of production with respect to the liability of an                    
          individual for an addition to tax under section 6651(a)(1).  Sec.           
          7491(c).  The burden of showing reasonable cause under section              
          6651(a) remains on the taxpayer.  Higbee v. Commissioner, 116               
          T.C. 438, 446-448 (2001).  “Reasonable cause” requires petitioner           
          to demonstrate that she exercised ordinary business care and                
          prudence and nevertheless was unable to file her 1999 Federal               
          income tax return by the due date.  United States v. Boyle, 469             
          U.S. 241, 246 (1985); sec. 301.6651-1(c), Proced. & Admin. Regs.            
          Willful neglect is defined as a “conscious, intentional failure             
          or reckless indifference.”  United States v. Boyle, supra at 245.           
               We have found that petitioner did not file a tax return for            
          1999.  On the record before us, we find that respondent has                 
          satisfied his burden of production with regard to the section               
          6651(a)(1) addition to tax.  See sec. 7491(c); Higbee v.                    

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