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II. Discussion
1. Additions to Tax Under Section 6651(a)(1)
Section 6651(a)(1) imposes an addition to tax for failure to
file a return when due “unless it is shown that such failure is
due to reasonable cause and not due to willful neglect”. The
addition equals 5 percent for each month that the return is late,
not to exceed 25 percent in total. The Commissioner has the
burden of production with respect to the liability of an
individual for an addition to tax under section 6651(a)(1). Sec.
7491(c). The burden of showing reasonable cause under section
6651(a) remains on the taxpayer. Higbee v. Commissioner, 116
T.C. 438, 446-448 (2001). “Reasonable cause” requires
petitioners to demonstrate that they exercised ordinary business
care and prudence and nevertheless were unable to file their 2000
and 2001 Federal income tax returns by the due date. United
States v. Boyle, 469 U.S. 241, 246 (1985); sec. 301.6651-1(c),
Proced. & Admin. Regs. Willful neglect is defined as a
“conscious, intentional failure or reckless indifference.”
United States v. Boyle, supra at 245.
Petitioners stipulated they did not file tax returns for
2000 and 2001 within the time required by law. Respondent has
thus satisfied his burden of production with regard to the
section 6651(a)(1) addition to tax. See Higbee v. Commissioner,
supra. Petitioners have neither offered an explanation for their
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