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v. Helvering, 290 U.S. 111, 115 (1933).7 However, the
Commissioner bears the burden of proof with respect to any new
matter raised in the answer. Rule 142(a). The parties agree
that petitioner bears the burden of proof with respect to the
penalties under section 6662(h). The parties also agree that
respondent bears the burden of proof with respect to the
penalties under section 6662(b)(1) and (2) because respondent
asserted these penalties in his amendment to answer.
C. Section 6662(h): Gross Valuation Misstatements
Under section 6662(h), a taxpayer may be liable for a 40-
percent penalty on any portion of an underpayment of tax
attributable to gross valuation misstatements. However, no
penalty is imposed unless the portion of such underpayment
exceeds $5,000. Sec. 6662(e)(2). A gross valuation misstatement
means any substantial valuation misstatement, as determined under
section 6662(e), by substituting “400 percent” for “200 percent”.
Sec. 6662(h)(2)(A). There is a substantial valuation
misstatement if “the value of any property (or the adjusted basis
of any property) claimed on any return * * * is 200 percent or
more of the amount determined to be the correct amount of such
7 While sec. 7491 shifts the burden of proof and/or the
burden of production to the Commissioner in certain
circumstances, this section is not applicable in this case
because respondent’s examination of petitioner’s returns did not
commence after July 22, 1998. See Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec.
3001(c), 112 Stat. 727.
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