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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 Internal
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