- 47 -
petitioners’ evidence in many material respects is not sufficient
to satisfy either their initial burden of production or their
ultimate burden of persuasion. Because petitioners have failed
to convince us that respondent’s determination was erroneous, we
sustain respondent’s determination that the annuity transactions
lacked economic substance.
Because we sustain respondent’s determination, we need not
and do not decide the alternative issues raised by respondent.
We turn instead to respondent’s contention that petitioners are
liable for the accuracy-related penalty under section 6662.
II. Petitioners’ Liability for Section 6662 Penalty
Respondent contends that petitioners are liable for the
accuracy-related penalty under section 6662 on alternate grounds:
(1) The underpayment of tax was attributable to negligence or
disregard of rules and regulations within the meaning of section
6662(b)(1), and (2) there was a substantial underpayment of
income tax within the meaning of section 6662(b)(2).
43(...continued)
any witnesses to dispute petitioners’ version of the facts, we
are required to accept petitioners’ evidence without question.
Petitioners are mistaken. In order to satisfy their initial
burden of production and their ultimate burden of persuasion,
petitioners were required to produce evidence that was credible.
If petitioners’ evidence is not credible or if petitioners’
evidence is not convincing enough to satisfy us that respondent’s
determination is erroneous, petitioners are not entitled to a
decision in their favor.
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 NextLast modified: May 25, 2011