Melvin D. Lee - Page 13

                                       - 13 -                                         
          reasonable cause and good faith.  Secs. 6662(d)(2)(B),                      
               Under section 7491(c), respondent has the burden of                    
          production with respect to a section 6662 accuracy-related                  
          penalty.  Once respondent meets that burden of production,                  
          however, the taxpayer continues to have the burden of proof with            
          regard to whether respondent’s determination of the penalty is              
          correct.  Rule 142(a); Higbee v. Commissioner, 116 T.C. 438, 446            
               As a result of our holdings herein, petitioner, on his 1997            
          individual Federal income tax return, understated his tax by more           
          than $5,000 and also by more than 10 percent of the tax required            
          to be shown.  Respondent has met his burden of production with              
          respect to the accuracy-related penalty.4                                   
               Petitioner argues that the understatement of tax on his 1997           
          individual Federal income tax return was due to reasonable cause            
          and was made in good faith because of his reliance on his                   
          accountant.  We disagree.                                                   
               The only alleged erroneous advice petitioner’s accountant              
          gave to petitioner related to the carryforward of the claimed               
          1996 NOL to 1997 instead of a carryback thereof to 1993, 1994,              
          and 1995.  That advice, however, has no bearing on our holding              

               4The actual amount to which the sec. 6662 accuracy-related             
          penalty applies is subject to the Rule 155 computation.                     

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011