Bennett Geiger - Page 16

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               Because petitioner failed to prove that a theft loss in                
          excess of $5,586 occurred,10 we do not reach the question of                
               Section 7491(c) provides that the Commissioner bears the               
          burden of production with respect to the liability of any                   
          individual for any addition to tax or penalty.  Consequently,               
          respondent must produce sufficient evidence to demonstrate that             
          the accuracy-related penalty is appropriate.  See Higbee v.                 
          Commissioner, 116 T.C. at 446.                                              
               Section 6662(a) imposes a 20-percent accuracy-related                  
          penalty with respect to the portion of any underpayment of tax              
          attributable to a substantial understatement of income tax.  An             
          “understatement” is the excess of the amount of tax required to             
          be shown on the return over the amount of tax that is actually              
          shown on the return.  Sec. 6662(d)(2)(A).  A “substantial                   
          understatement” of income tax exists if the amount of the                   
          understatement for the taxable year exceeds the greater of (1) 10           
          percent of the tax required to be shown on the return or (2)                
          $5,000.  Sec. 6662(d)(1)(A).                                                
               On his return, petitioner indicated a tax liability of zero.           
          Respondent determined the appropriate tax was $159,008.  The                

               10Although the evidence at trial suggests that no theft at             
          all occurred, on brief respondent has maintained the same                   
          position as taken in the notice of deficiency and does not seek             
          to disallow the deduction allowed in the notice of deficiency.              

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