-11- agrees to represent a client for compensation determined as a percentage of the amount recovered. Black’s Law Dictionary 614 (6th ed. 1990). We find that the $390,735 additional amount was a contingent fee. We conclude that petitioner is not entitled to exclude any of the attorney’s fee from income whether paid under FEHA’s fee- shifting statute or on a contingent fee basis. IV. Accuracy-Related Penalty We next consider whether petitioner is liable for the accuracy-related penalty under section 6662(a). Respondent argues that the accuracy-related penalty should apply to the $393,862 underpayment of income tax attributable to $994,602 of the jury award that petitioner incorrectly excluded from income. Respondent has the burden of production under section 7491(c) and must come forward with sufficient evidence that it is appropriate to impose the accuracy-related penalty. See Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). A taxpayer is liable for an accuracy-related penalty for any portion of an underpayment attributable to, among other things, a substantial understatement of income tax. Sec. 6662(a) and (b). There is a substantial understatement of income tax under section 6662(b)(2) if the amount of the understatement exceeds the greater of either 10 percent of the tax required to be shown onPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011