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preponderance of evidence, that the failure to report the gain on
the Black Butte property was not fraudulent.
For the foregoing reasons, the Court finds that petitioner’s
failure to report the $15,616 from the sale of the Vancouver
property and the $60,303 from the sale of the Black Butte property
was due to fraud.
B. Section 6662 Accuracy-Related Penalty
Section 6662(a) imposes a 20-percent accuracy-related penalty
on the portion of any underpayment attributable to negligence or
disregard of rules or regulations. Sec. 6662(b). The term
“negligence” includes any failure to make a reasonable attempt to
comply with the provisions of the internal revenue laws or to
exercise ordinary and reasonable care in the preparation of a tax
return. Sec. 1.6662-3(b)(1), Income Tax Regs. Respondent bears
the burden of production with respect to any penalty or addition
to tax. Sec. 7491(c); Higbee v. Commissioner, 116 T.C. 438, 446-
447 (2001). To meet his burden of production, respondent must
come forward with sufficient evidence indicating that it is
appropriate to impose the penalty. Higbee v. Commissioner, supra
at 446-447.
Respondent contends Annette C. Talmage is liable for the
accuracy-related penalty for 2002 under section 6662(a) on the
same underpayment of tax upon which the Court found petitioner
liable for the fraud penalty under section 6663(a).
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