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Under section 6654(d)(1)(B), the required annual payment,
which dictates the amount, if any, of a taxpayer’s required
estimated tax installments, see sec. 6654(d)(1), is the lesser of
90 percent of the tax shown for the subject taxable year (or, if
no return was filed, 90 percent of the tax for such year), sec.
6654(d)(1)(B)(i), or a fixed percentage (usually 100 percent but
can be higher, see sec. 6654(d)(1)(C)(i)) of the tax shown on the
taxpayer’s return for the preceding taxable year, sec.
6654(d)(1)(B)(ii). In order to satisfy his burden of production
under section 7491(c) regarding petitioner’s liability for the
section 6654 addition to tax, respondent, at a minimum, must
produce evidence necessary to enable the Court to conclude that
petitioner had a required annual payment under section
6654(d)(1)(B).
Respondent produced evidence establishing that petitioner
did not file a return for 2003 and that, after concessions,
petitioner had a revised income tax liability of $3,854 for 2003,
the year at issue. This evidence was sufficient to permit this
Court to make the analysis required by section 6654(d)(1)(B)(i).
However, in order to permit this Court to make the analysis
required by section 6654(d)(1)(B)(ii)15 and to conclude that
respondent had met his burden of producing evidence that
15Sec. 6654(d)(1)(B)(ii) does not apply if the preceding
taxable year was not a taxable year of 12 months or if the
individual did not file a return for the preceding taxable year.
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