         RALIM S. EL, PETITIONER v. COMMISSIONER              OF
              INTERNAL REVENUE, RESPONDENT
          Docket No. 19012–12.            Filed March 12, 2015.

         R determined a deficiency in P’s Federal income tax and
      additions to tax under I.R.C. sec. 6651(a)(1) and (2). Included
      in R’s deficiency determination is additional tax under I.R.C.
      sec. 72(t). We have not previously decided whether, under
      I.R.C. sec. 7491(c), the Commissioner bears the burden of
      production with respect to the additional tax under I.R.C. sec.
      72(t). See Milner v. Commissioner, T.C. Memo. 2004–111, 87
      T.C.M. (CCH) 1287, 1288 n.2 (2004). Held: P was required to
      file a return for 2009. Held, further, P failed to report wage
      income. Held, further, P failed to report a deemed taxable dis-
      tribution from his retirement account. Held, further, I.R.C.
      sec. 7491(c) does not shift the burden of production to R with
      respect to the additional tax under I.R.C. sec. 72(t) because
      the additional tax is a tax and not a penalty, addition to tax,
      or additional amount. Held, further, P is liable for the I.R.C.
      sec. 72(t) additional tax on the deemed taxable distribution.

140
(140)                       EL v. COMMISSIONER                                141


        Held, further, P is liable for the I.R.C. sec. 6651(a)(1) addition
        to tax for failing to timely file a return. Held, further, P is not
        liable for the I.R.C. sec. 6651(a)(2) addition to tax for failing
        to timely pay tax shown on a return. Held, further, P is not
        liable for an I.R.C. sec. 6673(a)(1) penalty for asserting frivo-
        lous or groundless positions but is warned.

  Ralim S. El, pro se.
  Rose E. Gole and Rebekah A. Myers, for respondent.

                                    OPINION

   MARVEL, Judge: Respondent determined a deficiency in
petitioner’s Federal income tax of $6,436 and additions to tax
under section 6651(a)(1) and (2) of $950 and $485, respec-
tively, for 2009. 1 The issues for decision are: (1) whether
petitioner had an obligation to file a 2009 return; (2)
whether petitioner failed to report $48,001 of wage
income; (3) whether petitioner failed to report a deemed tax-
able distribution of $2,802 from his retirement account; (4) if
so, whether petitioner is liable for the additional tax under
section 72(t) on the deemed taxable distribution; (5) whether
petitioner is liable for the addition to tax under section
6651(a)(1) for failing to timely file a return; (6) whether peti-
tioner is liable for the addition to tax under section
6651(a)(2) for failing to timely pay tax shown on a return;
and (7) whether petitioner is liable for a penalty under sec-
tion 6673(a)(1) for asserting frivolous or groundless positions
before this Court.

                                 Background
  The parties submitted this case fully stipulated under Rule
122. The stipulated facts and facts drawn from the stipulated
exhibits are incorporated herein by this reference. Petitioner
resided in New York when he petitioned this Court.
  In 2009 petitioner was an assistant with the Manhattan
Psychiatric Center. The Manhattan Psychiatric Center is run
by the New York State Office of Mental Health. In 2009 the
State of New York (New York) paid petitioner wages of
  1 Unless otherwise indicated, all section references are to the Internal
Revenue Code (Code) as amended and in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and Procedure.
Some monetary amounts have been rounded to the nearest dollar.
142        144 UNITED STATES TAX COURT REPORTS            (140)


$48,001 for services that he provided to the Manhattan Psy-
chiatric Center. New York issued to petitioner a Form W–2,
Wage and Tax Statement, for 2009. The Form W–2 reported
that petitioner had received wages of $48,001 and that New
York had withheld Federal income tax of $2,217.
  Petitioner is a member of the Employees’ Retirement
System (ERS) through the Manhattan Psychiatric Center.
ERS is a member of the New York State and Local Retire-
ment System (NYSLRS). The ERS retirement plan in which
petitioner participates permits participants to take loans
against their accounts, and loans from the ERS retirement
plan are governed by rules established for the NYSLRS. The
parties do not dispute that ERS administers a qualified plan
for purposes of section 72 and that petitioner participated in
the qualified plan.
  In years before 2009 petitioner had requested and received
loans from his ERS retirement account. On April 14, 2009,
petitioner again requested a loan in the maximum allowable
amount from ERS. ERS issued a loan of $5,993 to petitioner
on April 29, 2009. After ERS distributed the loan proceeds to
petitioner, petitioner’s retirement account showed that he
had total contributions to his ERS retirement plan of $17,071
and that he had an outstanding loan balance of $12,802.
  ERS determined for 2009 that $2,802 of petitioner’s loan
proceeds was taxable. The NYSLRS issued to petitioner a
Form 1099–R, Distributions From Pensions, Annuities,
Retirement or Profit-Sharing Plans, IRAs, Insurance Con-
tracts, etc., for 2009, which reported that petitioner had
received a taxable distribution of $2,802.
  Petitioner did not file a Federal income tax return for
2009.

                          Discussion
I. Preliminary Matters
  Generally, the Commissioner’s determination of a defi-
ciency is presumed correct, and the taxpayer bears the bur-
den of proving that the determination is improper. Rules
122(b), 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115
(1933). However, the U.S. Court of Appeals for the Second
Circuit, to which an appeal in this case appears to lie absent
a stipulation to the contrary, see sec. 7482(b)(1)(A), (2), has
(140)                     EL v. COMMISSIONER                             143


held that for the presumption of correctness to attach to the
notice of deficiency in unreported income cases, the Commis-
sioner must establish some evidentiary foundation con-
necting the taxpayer with the income-producing activity, see
Llorente v. Commissioner, 649 F.2d 152, 156 (2d Cir. 1981),
aff ’g in part, rev’g in part and remanding 74 T.C. 260 (1980).
   The parties stipulated that petitioner received unreported
wages and unreported loan proceeds from his ERS retire-
ment account in 2009. Respondent has therefore established
the necessary evidentiary foundation for the presumption of
correctness to attach. Respondent’s determinations that peti-
tioner had unreported income and is liable for a deficiency
for 2009 are presumed correct, and petitioner bears the bur-
den of proving that respondent’s determinations are erro-
neous. See Rules 122(b), 142(a)(1); Welch v. Helvering, 290
U.S. at 115. 2
II. Requirement To File a Return for 2009
   Section 6012 requires every individual who has gross
income over a certain amount to file an income tax return.
An unmarried individual taxpayer must make a return if he
or she has gross income equal to or in excess of the sum of
the exemption amount and the basic standard deduction
applicable to that individual. See sec. 6012(a)(1)(A)(i). Under
section 151(a), an individual is allowed an income exemption
as a deduction when computing his or her taxable income.
The exemption amount is adjusted each year for inflation
and was $3,650 for 2009. 3 See sec. 151(d)(4); Rev. Proc.
2008–66, sec. 3.19(1), 2008–2 C.B. (Vol. 2) 1107, 1112. Under
section 63 an individual taxpayer who does not elect to
itemize deductions is allowed to deduct a standard amount—
known as a standard deduction—from his or her income. See
sec. 63(b) and (c). The standard deduction for petitioner was
  2 Petitioner  does not contend, nor has he demonstrated, that he is enti-
tled to a shift in the burden of proof as to any disputed factual issue under
sec. 7491(a).
   3 The exemption amount begins to phase out when a taxpayer’s adjusted

gross income exceeds a threshold amount, which was $166,800 for peti-
tioner for 2009. See sec. 151(d)(3); Rev. Proc. 2008–66, sec. 3.19(2), 2008–
2 C.B. (Vol. 2) 1107, 1112–1113. Petitioner’s adjusted gross income was
below $166,800. Accordingly, his personal exemption is not reduced for
2009.
144           144 UNITED STATES TAX COURT REPORTS                       (140)


$5,700 for 2009. 4 See sec. 63(c)(1)(A); Rev. Proc. 2008–66,
sec. 3.10(1), 2008–2 C.B. (Vol. 2) at 1111–1112.
   Petitioner does not contend that he was entitled to any
additional deductions under section 63(c)(1) or that he was
married in 2009. Consequently, petitioner is entitled only to
a personal exemption of $3,650 under section 151(a) and a
basic standard deduction of $5,700 under section 63(c)(1)(A)
for 2009. The sum of these amounts is $9,350. Because peti-
tioner’s income for 2009 was greater than $9,350, see infra
parts III and IV, he was required to file a return for that
year.
III. Unreported Wage Income
   Gross income includes ‘‘all income from whatever source
derived’’, including wages. See sec. 61(a)(1). In 2009 New
York paid petitioner wages of $48,001 for services that he
provided to the Manhattan Psychiatric Center, but petitioner
did not report the wage income on a filed tax return. Con-
sequently, we sustain respondent’s determination that peti-
tioner had unreported wage income of $48,001 for 2009. 5
IV. Unreported Deemed Taxable Distribution
   Section 402(a) provides that distributions from a trust
described in section 401(a) are generally taxable to the dis-
tributee, in the year in which the distribution occurs, under
section 72. Ordinarily, a loan from a qualified employer plan
to a participant is a taxable distribution in the year received.
  4 An   additional standard deduction is allowed a single taxpayer who is
not a surviving spouse and has attained age 65 before the end of the tax-
able year. See secs. 63(f)(1)(A), 6012(a)(1)(B). Petitioner has not shown that
he qualifies for this additional standard deduction.
   5 Following the submission of this case under Rule 122, we asked peti-

tioner to explain his legal position regarding his obligation to file a return
and report his income. Petitioner stated that he did not report his wage
income because it was subject to withholding and his employer had with-
held Federal income tax from that wage income as reflected on his 2009
Form W–2. Petitioner argued that he is not required to report wage income
that is subject to withholding and from which income tax is withheld be-
cause the income has already been taxed. We explained to petitioner that
income subject to withholding must still be reported on a timely filed Fed-
eral income tax return if a taxpayer is required to file one. Because peti-
tioner had sufficient gross income in 2009 to require the filing of a return,
petitioner was required to report his wage income on that return.
(140)                     EL v. COMMISSIONER                               145


See sec. 72(p)(1)(A). However, a loan is not a taxable dis-
tribution if it meets three requirements: (1) the principal
amount of the loan does not exceed the statutorily specified
amount; (2) the loan is repayable within five years; and (3)
the loan requires substantially level amortization over the
loan term. See sec. 72(p)(2). Under section 72(p)(2)(A), the
exemption applies only when a loan (when added to the out-
standing balance of all other loans from the plan) does not
exceed the lesser of:
    (i) $50,000, reduced by the excess (if any) of—
       (I) the highest outstanding balance of loans from the plan during the
    1-year period ending on the day before the date on which such loan
    was made, over
       (II) the outstanding balance of loans from the plan on the date on
    which such loan was made, or
    (ii) the greater of (I) one-half of the present value of the nonforfeitable
  accrued benefit of the employee under the plan, or (II) $10,000.
  Respondent contends that ERS is a qualified employer plan
and that distributions from petitioner’s ERS retirement plan
account are taxable under section 72. Because petitioner does
not dispute these contentions, we deem them conceded and
will analyze the tax treatment of the April 29, 2009, loan
proceeds under the provisions of section 72(p).
  After petitioner received the April 29, 2009, loan proceeds,
petitioner’s loan balance in his ERS retirement plan account
was $12,802. This is $2,802 greater than the greater of one-
half of his ‘‘nonforfeitable accrued benefit’’ (i.e., one-half of
$17,071) or $10,000. 6 See sec. 72(p)(2)(A)(ii). We therefore
conclude that respondent correctly determined that petitioner
had a deemed taxable distribution of $2,802 from his ERS
retirement plan account in 2009.
V. Additional Tax Under Section 72(t)
   Subsection (t) of section 72 bears the descriptive title ‘‘10
Percent Additional Tax on Early Distributions From Quali-
fied Retirement Plans’’. Paragraph (1) of subsection (t)
imposes a 10% ‘‘additional tax’’ on any distribution from a
  6 The  $10,000 amount is also less than $50,000 less the excess of the
highest outstanding balance of loans from petitioner’s ERS account during
the one-year period ending on April 28, 2009, over the outstanding balance
of loans from petitioner’s ERS account on April 29, 2009. See sec.
72(p)(2)(A)(i).
146              144 UNITED STATES TAX COURT REPORTS                  (140)


qualified retirement plan (as defined in section 4974(c)).
Paragraph (2) provides, however, that, with certain excep-
tions not applicable here, the general rule of section 72(t)(1)
will not apply to distributions described in section
72(t)(2)(A)–(G). Among the distributions described in section
72(t)(2)(A), which are not subject to the section 72(t)(1) addi-
tional tax, are distributions that are made on or after the
date on which the employee attains age 591⁄2, sec.
72(t)(2)(A)(i), and distributions made to an employee after
separation from service if the employee has attained age 55,
sec. 72(t)(2)(A)(v). 7
   After reviewing the record, we observed that the parties
did not stipulate or provide any evidence with respect to peti-
tioner’s age on the date on which he received the deemed dis-
tribution or that any other exception in section 72(t)(2)
applied. Because we have not yet decided whether, under
section 7491(c), the Commissioner bears the initial burden of
production with respect to the additional tax under section
72(t), see Milner v. Commissioner, T.C. Memo. 2004–111, 87
T.C.M. (CCH) 1287, 1288 n.2 (2004), we ordered the parties
to file supplemental briefs on this issue.
   Respondent contends that (1) section 7491(c) does not place
the initial burden of production with respect to the additional
tax under section 72(t) on him because it is an ‘‘additional
tax’’, sec. 72(t)(1), and not a ‘‘penalty, addition to tax, or addi-
tional amount’’, sec. 7491(c), and (2) even if the additional
tax under section 72(t) is an ‘‘additional amount’’ under sec-
tion 7491(c), the burden of production with respect to statu-
tory exceptions should be on petitioner. We agree with
respondent’s first contention and need not address the
second. 8
  7 Petitioner does not dispute respondent’s contention that his ERS retire-
ment account is a qualified retirement plan within the meaning of sec.
4974(c). In the light of our holding that the ‘‘additional tax’’
under sec. 72(t) is not a ‘‘penalty, addition to tax, or additional
amount’’ under sec. 7491(c), we deem this issue conceded.
   8 Several recent cases cite Bunney v. Commissioner, 114 T.C. 259, 265

(2000) (citing Matthews v. Commissioner, 92 T.C. 351, 361–362 (1989),
aff ’d, 907 F.2d 1173 (D.C. Cir. 1990)), where we held that the taxpayer
‘‘has the burden of proving his entitlement to any of * * * [the sec.
72(t)(2)(A)] exceptions.’’ See, e.g., Hyde v. Commissioner, T.C. Memo. 2011–
104, 101 T.C.M. (CCH) 1502, 1505 (2011), aff ’d, 471 Fed. Appx. 537 (8th
Cir. 2012); Wagenknecht v. Commissioner, T.C. Memo. 2008–288, 96
(140)                      EL v. COMMISSIONER                               147


   Section 7491(c) provides as follows: ‘‘Penalties.—Notwith-
standing any other provision of this title, the Secretary[9]
shall have the burden of production in any court proceeding
with respect to the liability of any individual for any penalty,
addition to tax, or additional amount imposed by this title.’’
The terms ‘‘penalty, addition to tax, or additional amount’’
mirror, in part, the title of chapter 68 of the Code: ‘‘Additions
to the Tax, Additional Amounts, and Assessable Penalties’’. 10
What these terms have in common is that they refer to
amounts that are assessed and collected as taxes but are not
themselves taxes or surtaxes. 11 See Pen Coal Corp. v.
Commissioner, 107 T.C. 249, 258 (1996) (‘‘As our detailed
analysis of section 6214(a) and its legislative history in
Bregin amply demonstrates, Congress used the phrase ‘any
additional amount, or any addition to the tax’ in section
6214(a) to ensure an understanding that this Court’s jurisdic-
tion encompasses items that are to be assessed, collected,
and paid in the same manner as taxes, including the addi-
tions to tax and other additional amounts (not labeled ‘addi-
tions to tax’) described in chapter 68.’’ (citing Bregin v.
T.C.M. (CCH) 472, 474 (2008); Banister v. Commissioner, T.C. Memo.
2008–201, 96 T.C.M. (CCH) 114, 115 (2008), aff ’d, 418 Fed. Appx. 637 (9th
Cir. 2011). However, Bunney involved an additional tax imposed in connec-
tion with an examination that began before July 23, 1998, see Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105–
206, sec. 3001(c), 112 Stat. at 727, and the taxpayer in that case anyway
bore the burden of proof under Rule 142(a), see Matthews v. Commissioner,
92 T.C. at 361–362 (citing Rule 142(a) and Welch v. Helvering, 290 U.S.
111, 115 (1933)). Moreover, none of the recent cases that relied on Bunney
cited or discussed the applicability of sec. 7491(c) to the sec. 72(t)(2)(A) ex-
ceptions. In any event our holding in this case is consistent with Bunney
and the more recent cases that relied on it.
   9 The term ‘‘Secretary’’ means ‘‘the Secretary of the Treasury or his dele-

gate.’’ Sec. 7701(a)(11)(B).
   10 Although sec. 7806(b) provides that ‘‘[n]o inference, implication, or pre-

sumption of legislative construction shall be drawn or made by reason of
the location or grouping of any particular section or provision or portion
of ’’ the Code and that ‘‘descriptive matter relating to the contents of * * *
[the Code cannot] be given any legal effect’’, we may consider the similarity
of terms and provisions within the Code, as well as any descriptive matter,
as an aid to interpretation. See Corbalis v. Commissioner, 142 T.C. 46, 55
(2014) (citing Pen Coal Corp. v. Commissioner, 107 T.C. 249, 256, 258
(1996)).
   11 By its terms sec. 7491(c) applies to penalties, additions to tax, and ad-

ditional amounts provided for in tit. 26, Internal Revenue Code.
148           144 UNITED STATES TAX COURT REPORTS                         (140)


Commissioner, 74 T.C. 1097, 1102–1103 (1980))). By contrast,
the burden of production with respect to taxes and surtaxes
is normally on the taxpayer. 12 See Rule 142(a); Welch v.
Helvering, 290 U.S. at 115.
   For the following reasons we are persuaded that the sec-
tion 72(t) additional tax is a ‘‘tax’’ and not a ‘‘penalty, addi-
tion to tax, or additional amount’’ within the meaning of sec-
tion 7491(c). First, section 72(t) calls the exaction that it
imposes a ‘‘tax’’ and not a ‘‘penalty’’, ‘‘addition to tax’’, or
‘‘additional amount’’. Second, several provisions in the Code
expressly refer to the additional tax under section 72(t) using
the unmodified term ‘‘tax’’. See secs. 26(b)(2), 401(k)(8)(D),
(m)(7)(A), 414(w)(1)(B), 877A(g)(6). Third, section 72(t) is in
subtitle A, chapter 1 of the Code. Subtitle A bears the
descriptive title ‘‘Income Taxes’’, and chapter 1 bears the
descriptive title ‘‘Normal Taxes and Surtaxes’’. Chapter 1
provides for several income taxes, and additional income
taxes are provided for elsewhere in subtitle A. By contrast,
most penalties and additions to tax are in subtitle F, chapter
68 of the Code. In Ross v. Commissioner, T.C. Memo. 1995–
599, 70 T.C.M. (CCH) 1596, 1600–1601 (1999), we relied on
some of the same reasons in holding that the additional tax
under section 72(t) is a tax and not a penalty for purposes
of section 6013(d)(3) (relating to joint and several liability). 13
   Because the section 72(t) additional tax is a ‘‘tax’’ and not
a ‘‘penalty, addition to tax, or additional amount’’ within the
meaning of section 7491(c), the burden of production with
respect to the additional tax remains on petitioner. Petitioner
   12 Sec. 7491(a)(1) provides that ‘‘[i]f, in any court proceeding, a taxpayer

introduces credible evidence with respect to any factual issue relevant to
ascertaining the liability of the taxpayer for any tax imposed by subtitle
A or B, the Secretary shall have the burden of proof with respect to such
issue.’’ A taxpayer who wants to shift the burden of proof on any factual
issue under sec. 7491(a)(1) must first prove that he meets the require-
ments of sec. 7491(a)(2).
   13 Our construction of sec. 72(t) is consistent with its legislative history.

The legislative history indicates that sec. 72(t) was enacted to ‘‘impose an
additional income tax on early withdrawals’’ to discourage early with-
drawals from retirement accounts for nonretirement purposes and, in the
event of such early withdrawals, to recapture a measure of the tax benefits
provided. H.R. Rept. No. 99–426, at 729 (1985), 1986–3 C.B. (Vol. 2) 1, 729;
S. Rept. No. 99–313, at 613 (1986), 1986–3 C.B. (Vol. 3) 1, 613; see Pulliam
v. Commissioner, T.C. Memo. 1996–354.
(140)                  EL v. COMMISSIONER                   149


failed to introduce any credible evidence showing that he is
not liable for the additional tax under section 72(t) on the
deemed taxable distribution. We therefore sustain respond-
ent’s determination.
VI. Additions to Tax
  A. Burden of Proof
  The Commissioner bears the burden of production with
respect to a taxpayer’s liability for additions to tax and must
produce sufficient evidence indicating that it is appropriate
to impose the additions to tax. See sec. 7491(c); Higbee v.
Commissioner, 116 T.C. 438, 446 (2001). Once the Commis-
sioner carries the burden of production, the taxpayer must
come forward with persuasive evidence that the Commis-
sioner’s determination is incorrect or that the taxpayer had
reasonable cause or substantial authority for the position.
See Higbee v. Commissioner, 116 T.C. at 446–447.
  Relying on Swain v. Commissioner, 118 T.C. 358, 364–365
(2002), respondent contends that petitioner conceded the
additions to tax under section 6651(a)(1) and (2) by failing to
assign error to the additions to tax in the petition. See also
Rule 34(b)(4). We disagree.
  In Swain, the parties did not try or submit the case by
implied consent. By contrast, respondent first asserted that
petitioner failed to properly plead his case after this case was
submitted. Respondent’s answer and pretrial memorandum
both stated that the additions to tax were at issue, and—
presumably on that basis—the case was submitted for deci-
sion under Rule 122. We therefore conclude that the parties
submitted the issue of petitioner’s liability for the additions
to tax for decision by this Court by implied consent. See
Rules 41(b), 122. The burden of production with respect to
the additions to tax under section 6651(a)(1) and (2) is on
respondent. See sec. 7491(c).
  B. Addition to Tax Under Section 6651(a)(1)
  Section 6651(a)(1) authorizes the imposition of an addition
to tax for failure to timely file a return unless it is shown
that such failure is due to reasonable cause and not due to
willful neglect. See United States v. Boyle, 469 U.S. 241, 245
(1985). A failure to timely file a Federal income tax return
150          144 UNITED STATES TAX COURT REPORTS                   (140)


is due to reasonable cause if the taxpayer exercised ordinary
business care and prudence but nevertheless was unable to
file the return within the prescribed time. See sec. 301.6651–
1(c)(1), Proced. & Admin. Regs. Circumstances that are
considered to constitute reasonable cause for failure to timely
file a return are typically those outside of the taxpayer’s con-
trol, including, for example: (1) unavoidable postal delays; (2)
the timely filing of a return with the wrong office; (3) the
death or serious illness of the taxpayer or a member of the
taxpayer’s immediate family; (4) a taxpayer’s unavoidable
absence from the United States; (5) destruction by casualty
of a taxpayer’s records or place of business; and (6) reliance
on the erroneous advice of an IRS officer or employee. See
McMahan v. Commissioner, 114 F.3d 366, 369 (2d Cir. 1997),
aff ’g T.C. Memo. 1995–547.
   Petitioner was required to file a return for 2009, see supra
part II, and failed to do so. Accordingly, respondent has car-
ried his burden of producing evidence showing that the addi-
tion to tax under section 6651(a)(1) is appropriate.
   Petitioner has failed to introduce any credible evidence
showing that he had reasonable cause for failing to file his
2009 return. Accordingly, he is liable for the addition to tax
under section 6651(a)(1).
  C. Addition to Tax Under Section 6651(a)(2)
   Section 6651(a)(2) imposes an addition to tax for failure to
pay the amount of tax shown on a taxpayer’s Federal income
tax return on or before the payment due date, unless such
failure is due to reasonable cause and not due to willful
neglect. 14 The section 6651(a)(2) addition to tax applies only
when an amount of tax is shown on a return filed by the tax-
payer or a section 6020 substitute for return prepared by the
Secretary. See sec. 6651(a)(2), (g)(2); Cabirac v. Commis-
sioner, 120 T.C. 163, 170 (2003). Where the taxpayer did not
file a return, the Commissioner must introduce evidence that
a substitute for return satisfying the requirements of section
6020(b) was made. See Wheeler v. Commissioner, 127 T.C.
200, 210 (2006), aff ’d, 521 F.3d 1289 (10th Cir. 2008). A
  14 The amount of the addition to tax under sec. 6651(a)(2) reduces the

amount of the addition to tax under para. (1) for any month for which an
addition to tax applies under both paragraphs. See sec. 6651(c)(1).
(140)                 EL v. COMMISSIONER                     151


failure to timely pay the amount due on a Federal income tax
return is due to reasonable cause if the taxpayer exercised
ordinary business care and prudence in providing for the
timely payment of his or her tax liability but nevertheless
was either unable to pay the tax or would suffer undue hard-
ship if he or she paid on the due date. See sec. 301.6651–
1(c)(1), Proced. & Admin. Regs.
  Respondent concedes that he has not met his burden of
production on this issue because he failed to introduce into
evidence the substitute for return that he purportedly filed
for petitioner. See Wheeler v. Commissioner, 127 T.C. at 210.
Accordingly, petitioner is not liable for the addition to tax
under section 6651(a)(2).
  D. Penalty Under Section 6673(a)(1)
   Under section 6673(a)(1), this Court may require a tax-
payer to pay a penalty not in excess of $25,000 whenever it
appears that: (1) the taxpayer has instituted or maintained
proceedings primarily for delay; (2) the taxpayer’s position is
frivolous or groundless; or (3) the taxpayer unreasonably
failed to pursue available administrative remedies. A tax-
payer’s position is frivolous or groundless if it is ‘‘ ‘contrary
to established law and unsupported by a reasoned, colorable
argument for change in the law.’ ’’ Williams v. Commissioner,
114 T.C. 136, 144 (2000) (quoting Coleman v. Commissioner,
791 F.2d 68, 71 (7th Cir. 1986)).
   Although petitioner asserted several frivolous positions in
his answering brief, respondent did not request that we
impose on petitioner a penalty pursuant to section 6673(a)(1).
In the exercise of our discretion we will not impose a section
6673(a)(1) penalty on petitioner at this time. However, we
warn petitioner that if, in the future, he maintains ground-
less positions in this Court, he runs the risk that we will
sanction him under section 6673(a)(1).
   We have considered the parties’ remaining arguments, and
to the extent not discussed above, conclude those arguments
are irrelevant, moot, or without merit.
152        144 UNITED STATES TAX COURT REPORTS          (140)


  To reflect the foregoing,
                  Decision will be entered for respondent as
                to the deficiency and the section 6651(a)(1)
                addition to tax and for petitioner as to the
                section 6651(a)(2) addition to tax.

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