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C. Section 6654: Failure To Pay Estimated Income Tax
Section 6654 imposes an addition to tax for failure to make
timely and sufficient payments for estimated taxes. Petitioner
challenged the applicability of each addition to tax respondent
determined. Therefore, in order to satisfy his burden of
production under section 7491(c) for the section 6654 addition to
tax, respondent must produce the evidence necessary to enable the
Court to conclude that petitioner had an obligation to make an
estimated tax payment. Wheeler v. Commissioner, 127 T.C. 200,
211 (2006). Specifically, respondent must produce evidence
showing that petitioner had a “required annual payment” as
defined by section 6654(d)(1)(B) for the year at issue. Id.
Under section 6654(d)(1)(B), “required annual payment” means
the lesser of--
(i) 90 percent of the tax shown on the return for
the taxable year (or, if no return is filed, 90
percent of the tax for such year), or
(ii) 100 percent of the tax shown on the return of
the individual for the preceding taxable year.
Clause (ii) shall 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 such preceding
taxable year.
Petitioner did not file a tax return for 2000. Therefore,
under the flush language of section 6654(d)(1)(B), clause (ii)
does not apply with respect to determining the required annual
payment for 2001. Petitioner had a tax liability for 2001 but
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