Charles H. Little III - Page 6

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          income tax returns, utilizing the services of a responsible                 
          certified public accountant.  It appears that, for 1 or more                
          years prior to the year at issue, petitioner had to file returns            
          or amended returns to correctly report his income for those                 
          years.  Petitioner contends that, for these prior years, he was             
          not required by the IRS to pay any penalties.  At trial, counsel            
          for respondent agreed that, for these prior years, additions to             
          tax against petitioner were abated.  On this history, petitioner            
          contends he should not be held liable for the sections 6651(a)(1)           
          and 6654(a) additions to tax that are before the Court for the              
          2002 tax year.3                                                             
               Section 7491(c) imposes upon the Commissioner the “burden of           
          production” with respect to the liability of any person “for any            
          penalty, addition to tax, or additional amount imposed by this              
          title”.  In Higbee v. Commissioner, 116 T.C. 438, 446 (2001),               
          this Court held that the phrase “burden of production” does not             
          mean that the burden of proof is on the Commissioner with respect           
          to penalties and additions to tax.  The burden of production                
          under Higbee is satisfied where respondent shows, in the case of            
          the section 6651(a)(1) addition to tax, that no income tax return           
          has been filed or, if filed, was not filed timely and, with                 
          respect to section 6654, that estimated taxes have not been paid.           

               3For the year at issue, 2002, the income tax return was                
          filed in August 2004 and was accepted and processed by the IRS.             
          A copy of that return was not offered into evidence at trial.               

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