- 9 - taxpayer’s efforts to assess his proper tax liability, including the taxpayer’s reasonable and good faith reliance on the advice of a professional such as an accountant.” Higbee v. Commissioner, supra at 448-449. Other circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all the facts and circumstances, including the experience, knowledge, and education of the taxpayer. Sec. 1.6664-4(b)(1), Income Tax Regs. To prevail, the Commissioner must produce sufficient evidence that it is appropriate to apply the penalty to the taxpayer. Higbee v. Commissioner, supra at 446. Once the Commissioner meets his burden of production, the taxpayer bears the burden of supplying sufficient evidence to persuade the Court that the Commissioner’s determination is incorrect. Id. at 447. Petitioner has failed to keep adequate records or to substantiate properly the items in question. The record indicates that there is a substantial understatement of tax on petitioner’s return. Respondent has provided sufficient evidence to meet his burden of production. Petitioner has not produced evidence to prove that respondent’s determination of either negligence or, alternatively, a substantial understatement isPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011