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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