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their obligations to pay taxes, and other frivolous materials
that petitioners have submitted to the Court, similarly do not
specifically address any issue regarding the additions to tax.
We deem petitioners to have conceded these issues and hold that
respondent has no burden of production under section 7491(c) as
to the additions to tax. See Funk v. Commissioner, 123 T.C. 213,
215 (2004); Swain v. Commissioner, 118 T.C. 358, 363-364 (2002).
We sustain respondent’s determinations as to the various
additions to tax, subject to computational adjustments resulting
from respondent’s concession that petitioners are entitled to
mortgage interest deductions for 2003.5
E. Section 6673 Penalty
Section 6673(a)(1) authorizes this Court to impose a penalty
not in excess of $25,000 whenever it appears to the Court that
proceedings have been instituted or maintained primarily for
delay or that the taxpayer’s position in such proceedings is
5 For example, the notice of deficiency indicates that
respondent determined the amount of Mr. Jackson’s liability for
the sec. 6654 addition to tax for 2003 by calculating the
required annual payment by reference to 90 percent of Mr.
Jackson’s 2003 tax, pursuant to sec. 6654(d)(1)(B)(i). The
revised computation should take into account the decrease in Mr.
Jackson’s 2003 tax resulting from the allowance of the mortgage
interest deduction. Similarly, should the recomputed amount of
Mr. Jackson’s 2003 tax be less than $1,000, there would be no
sec. 6654 addition to tax. See sec. 6654(e)(1). (The evidence
indicates that Mr. Jackson had no amount withheld as tax in 2003;
accordingly, there is no credit allowable under sec. 31 that
might otherwise affect the operation of the exception in sec.
6654(e)(1).)
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Last modified: November 10, 2007