- 40 -
Regardless of whether respondent satisfied his burden of
production,27 the record establishes that petitioner reasonably
and in good faith relied on his return preparer. Petitioner
fully disclosed the facts and provided documents supporting his
gambling income (and losses) to his return preparer.
Consequently, we conclude that petitioner had reasonable cause
and acted in good faith as to any underpayment for 1999, 2000,
and 2001. Accordingly, we hold that petitioner is not liable for
the penalty pursuant to section 6662(a).
III. Conclusion
In reaching all of our holdings herein, we have considered
all arguments made by the parties, and to the extent not
mentioned above, we find them to be irrelevant or without merit.
On account of the parties’ concessions at trial and on brief,
Rule 155 computations will be necessary.
27 Pursuant to the parties’ concessions, our findings, and
our conclusions, it is unclear at this time whether there is a
substantial understatement.
We note that respondent bears the burden of proof for the
increased amount of the sec. 6662 penalty for 2000 that he raised
for the first time in the answer. See Rule 142(a)(1);
Sanderling, Inc. v. Commissioner, 66 T.C. 743, 756-760 (1976),
affd. in part and revd. in part on other grounds 571 F.2d 174 (3d
Cir. 1978); Snyder v. Commissioner, T.C. Memo. 2006-92; Paleveda
v. Commissioner, T.C. Memo. 1997-416, affd. without published
opinion 178 F.3d 1303 (11th Cir. 1999). Our resolution of this
issue, however, does not depend on who bears the burden of proof.
See Snyder v. Commissioner, supra.
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