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6664(c)(1); sec. 1.6664-4(a), Income Tax Regs. The determination
of whether a taxpayer acted with reasonable cause and in good
faith is made on a case-by-case basis, taking into account all
pertinent facts and circumstances. Sec. 1.6664-4(b)(1), Income
Tax Regs. Generally, the most important factor is the extent of
the taxpayer’s effort to assess the taxpayer’s proper tax
liability. Id.
Section 7491(c) places on the Commissioner the burden of
producing evidence showing that it is appropriate to impose any
penalty or addition to tax. Once the Commissioner meets that
burden, the taxpayer must produce evidence sufficient to show
that Commissioner’s determination is incorrect. Higbee v.
Commissioner, 116 T.C. 438, 447 (2001). The Commissioner need
not produce evidence relating to defenses such as reasonable
cause. Id. at 446.
Petitioner acknowledges receiving the Form 1099-R but claims
that “It got misplaced.” Even if this is true, there is no
indication petitioner timely contacted UBS PaineWebber for a
replacement Form 1099-R or otherwise informed the accounting firm
of the retirement income. Accordingly, we conclude that
respondent has met his burden of production by showing that
petitioners failed to exercise ordinary and reasonable care in
preparing their 2001 tax return. See sec. 6662(c); Gowni v.
Commissioner, supra.
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Last modified: May 25, 2011