- 12 - determination that the $160,000 payment to petitioner was includable in income was not in error. Whether Petitioner Is Liable for the Accuracy-Related Penalty We next consider whether petitioner is liable for the accuracy-related penalty under section 6662(a). Respondent determined that petitioner was liable for the accuracy-related penalty for 2001 for $160,400 of unreported income, including the $160,000 payment and $400 for a computer PCI provided her. Petitioner argues that even if she is liable for income tax on the $160,000 payment, she is not liable for the penalty because she acted in good faith and with reasonable cause. Respondent bears the burden of production under section 7491(c) and must come forward with sufficient evidence that it was appropriate to impose the penalty. See Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). Respondent determined that petitioner is liable for the accuracy-related penalty for negligence or disregard of rules or regulations and/or a substantial understatement of income tax under section 6662 for 2001. A taxpayer may be liable for a 20-percent penalty on any underpayment of tax attributable to negligence or disregard of rules or regulations or a substantial understatement of tax. Sec. 6662(a) and (b). “Negligence” is any failure to make a reasonable attempt to comply with the provisions of the InternalPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: March 27, 2008