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is appropriate to impose the relevant penalty, addition to tax,
or additional amount”. Swain v. Commissioner, 118 T.C. 358, 363
(2002); Higbee v. Commissioner, 116 T.C. 438, 446 (2001). If a
taxpayer files a petition alleging some error in the
determination of an addition to tax, the taxpayer’s challenge
will succeed unless the Commissioner produces evidence that the
addition to tax is appropriate. Swain v. Commissioner, supra at
363-365.
Petitioner challenged the section 6654 addition to tax in
her petition. Accordingly, respondent bears the burden of
production on this issue.
B. Section 6654
Section 6654 provides for an addition to tax in the event of
an underpayment of a required installment of individual estimated
tax. Sec. 6654(a) and (b). Each required installment of
estimated tax is equal to 25 percent of the “required annual
payment”, which is equal to the lesser of (1) 90 percent of the
tax shown on the individual’s return for that year (or, if no
return is filed, 90 percent of his or her tax for such year), or
(2) if the individual filed a return for the immediately
preceding taxable year, 100 percent4 of the tax shown on that
return. Sec. 6654(d)(1)(A) and (B)(i) and (ii). “In order to
4 If the adjusted gross income shown on the return for the
preceding taxable year exceeds $150,000, 100 percent is replaced
with 112 percent for 2001. Sec. 6654(d)(1)(C)(i).
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Last modified: May 25, 2011