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production in this case, however, our review of the record leads
us to the same conclusion; i.e., that petitioner is liable for
the section 6662(h) accuracy-related penalty for 1989 and the
section 6662(a) accuracy-related penalty for 1991, both in the
amounts respondent alleged in his answer. Thus, we need not and
do not discuss any further the parties’ dispute as to which of
them bears the burden of production in this case.
2. Sections 6662 and 6664
a. Overview
Section 6662 provides that a taxpayer may be liable for a
20-percent accuracy-related penalty on the portion of an
understatement of income tax attributable to (among other things)
negligence or disregard of rules or regulations or a substantial
understatement of income tax. See sec. 6662(a) and (b)(1) and
(2). Section 6662(h)(1) increases the amount of the section
6662(a) accuracy-related penalty to 40 percent in the case of
gross valuation misstatements. Section 6664(c)(1) provides that
no accuracy-related penalty under section 6662 applies to the
extent that the taxpayer has reasonable cause for an underpayment
of tax and acted in good faith with respect to that underpayment.
b. Negligence/Disregard of Rules or Regulations
For purposes of section 6662(a), negligence includes any
failure to make a reasonable attempt to comply with the
provisions of the Code or to exercise ordinary and reasonable
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