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Additions to Tax
Under section 7491(c), respondent has the burden of
production with respect to petitioners’ liability for the
additions to tax under sections 6651(a)(1) and 6654. Respondent
must accordingly offer sufficient evidence to indicate that it is
appropriate to impose each addition. See Higbee v. Commissioner,
116 T.C. 438, 446 (2001). Once this burden is met, petitioners
bear the burden of proving error in the determination, including
evidence of exculpatory factors. Id. at 446-447.
A. Section 6651(a)(1) Additions
Section 6651(a)(1) provides for an addition to tax for a
taxpayer’s failure to file a required return on or before the due
date, including extensions. Respondent determined that Mrs.
Callahan is liable for section 6651(a)(1) additions for 1997,
1998, 1999, and 2002 and determined that Mr. Callahan is liable
for section 6651(a)(1) additions for 1997, 1998, and 1999.
Petitioners have admitted receiving income during each of
these years in amounts sufficient to obligate them to file
Federal income tax returns. See sec. 6012. Petitioners admitted
that they did not file returns for any of their years in issue.
Therefore, respondent has met his burden of production under
section 7491(c).
Petitioners have offered no evidence of reasonable cause for
their failure to file. Accordingly, we sustain respondent’s
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Last modified: November 10, 2007