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respondent’s determination for the penalty are, alternatively,
that petitioners did not make a qualified contribution or, if a
contribution was made, its value was substantially lower than the
amount reported on their return.
A. The Burden of Proof
Generally, the burden of proving or showing error in
respondent’s determination is upon the taxpayer. See Rule
142(a). The burden of proof may shift to respondent in certain
situations. See sec. 7491(a). Petitioners concede that they
bear the burden of showing their entitlement to a conservation
easement deduction. Conversely, respondent concedes that he
bears the burden of production with respect to the section 6662
penalty. See sec. 7491(c).
B. The Conservation Easement
1. Background
Section 170(a)(1) allows a deduction for a charitable
contribution made during the taxable year. Generally, section
170(f)(3) does not permit a deduction for a charitable gift of
property consisting of less than the donor’s entire interest in
that property. An exception applies in the case of a “qualified
conservation contribution.” See sec. 170(f)(3)(B)(iii). A
contribution of real property may constitute a qualified
conservation contribution if: (1) The real property is a
“qualified real property interest”; (2) the donee is a “qualified
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