- 5 - B. Additions to Tax Pursuant to section 7491(c), the Commissioner has the burden of production as to whether a taxpayer is liable for an addition to tax. To meet this burden, he must produce sufficient evidence showing that imposition of the addition to tax is appropriate in the particular case. Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Once respondent meets this burden, petitioner must come forward with persuasive evidence that respondent’s determination is incorrect. See Rule 142(a); Higbee v. Commissioner, supra at 447. As a defense to the additions to tax, petitioner bears the burden of proof regarding reasonable cause and lack of willful neglect or the applicability of an exception. Secs. 6651(a), 6654(e). II. Business Expense Deductions As a general rule, section 162(a) authorizes deductions for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business”. Taxpayers are required to maintain records sufficient to substantiate each claimed deduction. Sec. 6001; Hradesky v. 4(...continued) information returns per sec. 6201(d), respondent introduced in evidence canceled checks substantiating most of the payments. Moreover, the parties stipulated the nonemployee compensation income.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007