Daniel and Kristen Panice - Page 6




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          examination for purposes of establishing the date on which the              
          Commissioner started his examination as to the affected items at            
          issue.  According to respondent, the affected items were                    
          determined “in connection with” the examination of TBS 90-1 and,            
          hence, the date on which that examination began is the date that            
          is used to test whether section 7491(c) applies to this case.               
          According to petitioner, the Commissioner’s determination of the            
          affected items resulted from a separate, nonpartnership-level               
          examination of petitioners personally and, hence, the starting              
          date of the later examination is the date to be used to determine           
          the applicability of section 7491(c).                                       
               Notwithstanding which party bears the burden of production             
          in this case, our review of the record leads us to the same                 
          conclusion; i.e., that petitioners are liable for the section               
          6662(h) accuracy-related penalty for 1992 as determined by                  
          respondent.  Accordingly, 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.  See McDonough v. Commissioner, T.C.            
          Memo. 2007-101.                                                             
          2.  Overview of Sections 6662(h) and 6664                                   
               Section 6662(h) provides that a taxpayer may be liable for a           
          40-percent penalty on any portion of an underpayment of tax                 
          attributable to gross valuation misstatements.  No penalty is               
          imposed under that section, however, unless the portion exceeds             







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