Michael Alan Jackson and Mary Joy Jackson, et al. - Page 8

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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.               

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