Janet A. Phillips - Page 7
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III. Additions to Tax
A. Commissioner’s Burden of Production
Under section 7491(c), the Commissioner bears the burden of
production with respect to a taxpayer’s liability for penalties
or additions to tax. This means that the Commissioner must “come
forward with sufficient evidence indicating that it is
appropriate to impose the relevant penalty.” Higbee v.
Commissioner, 116 T.C. 438, 446 (2001). In instances where an
exception to the penalty or addition to tax is afforded upon a
showing of reasonable cause, the taxpayer bears the burden of
demonstrating such cause. Id. at 446-447.
B. Section 6651(a)(1) Addition to Tax
Section 6651(a)(1) imposes an addition to tax for failure to
file a timely return unless it is shown that such failure is due
to reasonable cause and not to willful neglect. “[R]easonable
cause” is described by the applicable regulations as the exercise
of “ordinary business care and prudence”. Sec. 301.6651-1(c)(1),
Proced. & Admin. Regs.; see also United States v. Boyle, 469 U.S.
241, 246 (1985). “[W]illful neglect” is interpreted as a
“conscious, intentional failure or reckless indifference.”
United States v. Boyle, supra at 245.
Here, respondent has met the burden of production because
the “zero return” filed by petitioner with respect to her 2004
taxable year is not a valid return. See Cabirac v. Commissioner,
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Last modified: March 27, 2008