(ii) $1,000,000 limitation.--The aggregate amount treated as acquisition indebtedness for any period shall not exceed $1,000,000 ($500,000 in the case of a married individual filing a separate return).

(ii) Limitation.--The aggregate amount treated as home equity indebtedness for any period shall not exceed $100,000 ($50,000 in the case of a separate return by a married individual).

138 T.C. 382">*386 There is no dispute that the property meets the definition of a qualified residence and that the mortgage interest petitioner paid is qualified residence interest because it was paid on acquisition indebtedness and home equity indebtedness 2012 U.S. Tax Ct. LEXIS 22">*28 secured by the property.

In his notice of deficiency respondent allowed petitioner to deduct home mortgage interest on a total of $550,000 of indebtedness ($500,000 in acquisition indebtedness under section 163(h)(3)(B)(ii) plus $50,000 of home equity indebtedness under section 163(h)(3)(C)(ii)).⁶ Petitioner claims that she should be allowed to deduct interest paid on the entire $1 million of indebtedness.

Petitioner correctly asserts that the parenthetical indebtedness limitations of section 163(h)(3)(B)(ii) and (C)(ii) are $550,000 for each spouse filing a separate return. However, petitioner further claims that these limitations were enacted so that, collectively, a 2012 U.S. Tax Ct. LEXIS 22">*29 married couple filing separately can claim $1.1 million of aggregate indebtedness across both of their returns and is not limited to claiming a maximum of $550,000 on any one return. We disagree.

When we interpret a statute, our purpose is to give effect to Congress' intent. To accomplish this we begin with the statutory language, which is the most persuasive evidence of the statutory purpose. See United States v. Am. Trucking Ass'ns, Inc., 310 U.S. 534">310 U.S. 534, 310 U.S. 534">542-543, 60 S. Ct. 1059">60 S. Ct. 1059, 84 L. Ed. 1345">84 L. Ed. 1345 (1940); Sophy v. Commissioner, 138 T.C. 204">138 T.C. 204, 138 T.C. 204">209-10 (2012). The words of the statute should be construed in their "ordinary, everyday", and plain meaning. Crane v. Commissioner, 331 U.S. 1">331 U.S. 1, 331 U.S. 1">6, 67 S. Ct. 1047">67 S. Ct. 1047, 91 L. Ed. 1301">91 L. Ed. 1301, 1947-1 C.B. 97 (1947). Usually the meaning of the statutory language is conclusive. See United States v. Ron Pair Enters., Inc., 489 U.S. 235">489 U.S. 235, 489 U.S. 235">242, 109 S. Ct. 1026">109 S. Ct. 1026, 103 L. Ed. 2d 290">103 L. Ed. 2d 290 (1989); Woodral v. Commissioner, 112 T.C. 19">112 T.C. 19, 112 T.C. 19">23 (1999). If a statute is silent or ambiguous, we may look to the statute's legislative history in an attempt to determine congressional intent. See Burlington N. R.R. v. Okla. Tax Comm'n, 481 U.S. 454">481 U.S. 454, 481 U.S. 454">461, 107 S. Ct. 1855">107 S. Ct. 1855, 95 L. Ed. 2d 404">95 L. Ed. 2d 404 (1987); United States v. Harrell, 637 F.3d 1008">637 F.3d 1008, 637 F.3d 1008">1012 (9th Cir. 2011). When a statute appears clear on its face, however, there must 2012 U.S. Tax Ct. LEXIS 22">*30 be unequivocal evidence 138 T.C. 382">*387 of legislative purpose before the statute is interpreted in a way that overrides the plain meaning of the words used therein. See Burlington, 481 U.S. 454">481 U.S. at 461; Harrell, 637 F.3d 1008">637 F.3d at 1012; Pallottini v. Commissioner, 90 T.C. 498">90 T.C. 498, 90 T.C. 498">503 (1988); Huntsberry v. Commissioner, 83 T.C. 742">83 T.C. 742, 83 T.C. 742">747-748 (1984).

We believe section 163(h)(3)(B)(ii) clearly states that a married individual filing a separate return is limited to a deduction for interest paid on $500,000 of home acquisition indebtedness. Similarly, we believe section 163(h)(3)(C)(ii) clearly states that a married individual filing a separate return is limited to a deduction for interest paid on $50,000 of home equity indebtedness.

Petitioner has not offered any unequivocal evidence of legislative purpose which would allow us to override the plain language of section 163(h)(3)(B)(ii) and (C)(ii).^{72012 U.S. Tax Ct. LEXIS 22">*31} As a result, we agree with respondent that petitioner is not entitled to a deduction for the interest paid on the entire $1 million of acquisition indebtedness incurred in purchasing the property. Rather, petitioner is entitled to deduct interest paid on only $550,000 of the mortgage indebtedness.

Section 6662(a) and (b)(1) and (2) imposes a 20% accuracy-related penalty if any part of an underpayment of tax required to be shown on a return is due to, among other things, negligence or disregard of rules or regulations or a substantial understatement of income tax. The penalty is 20% of the portion of the underpayment of tax to which the section applies. Sec. 6662(a).

The Commissioner bears the burden of production 2012 U.S. Tax Ct. LEXIS 22">*32 on the applicability of an accuracy-related penalty in that he must come forward with sufficient evidence indicating that it is proper to impose the penalty. Seesec. 7491(c); see also Higbee v. Commissioner, 116 T.C. 438">116 T.C. 438, 116 T.C. 438">446 (2001). Once the Commissioner meets this burden, the burden of proof 138 T.C. 382">*388 remains with the taxpayer, including the burden of proving that the penalty is inappropriate because of reasonable cause and good faith. See Higbee v. Commissioner, 116 T.C. 438">116 T.C. 446-447.

Respondent satisfies his burden of production by showing that the understatement meets the definition of "substantial". See Janis v. Commissioner, T.C. Memo 2004-117, aff'd, 461 F.3d 1080">461 F.3d 1080 (9th Cir. 2006), and aff'd, 469 F.3d 256">469 F.3d 256 (2d Cir. 2006). An understatement of income tax is "substantial" if it exceeds the greater of 10% of the tax required to be shown on the return or $5,000. Sec. 6662(d)(1)(A). An "understatement" is defined as the excess of the tax required to be shown on the return over the tax actually shown on the return, less any rebate. Sec. 6662(d)(2)(A). The understatement of income tax in this case is $7,589, which exceeds the greater of 10% of the tax required to be shown on the return⁸ or $5,000 2012 U.S. Tax Ct. LEXIS 22">*33 and is thus "substantial". Respondent has therefore met his burden of production.

The amount of an understatement shall be reduced by that portion of the understatement which is attributable to: (1) the tax treatment of any item by the taxpayer if there is or was substantial authority for such treatment; or (2) any item if the taxpayer adequately disclosed relevant facts affecting the item's tax treatment in the return or in a statement attached to the return and there is a reasonable basis for the tax treatment of the item by the taxpayer. Sec. 6662(d)(2)(B).

Petitioner claims that section 163 and the legislative history provide both substantial authority and a reasonable basis for her treatment of the mortgage interest paid. However, as stated supra pp. 8-9, we believe section 163(h)(3)(B)(ii) and (C)(ii) clearly limits deductions for interest paid on a home mortgage to the interest paid on $500,000 of home acquisition indebtedness and $50,000 of home equity indebtedness in the case of a married taxpayer filing separately. We therefore do not believe petitioner has any substantial authority or 2012 U.S. Tax Ct. LEXIS 22">*34 reasonable basis for the position she took on her 2007 tax return.

Petitioner also argues that the accuracy-related penalty does not apply because she meets the reasonable cause defense of section 6664(c)(1). Pursuant to that section, 138 T.C. 382">*389 accuracy-related penalties under section 6662 do not apply to any portion of an underpayment for which a taxpayer establishes that he or she: (1) had reasonable cause; and (2) acted in good faith. Whether a taxpayer has acted with reasonable cause and in good faith depends on the pertinent facts and circumstances, including efforts to assess the proper tax liability, the taxpayer's knowledge and experience, and the extent to which the taxpayer relied on the advice of a tax professional. Sec. 1.6664-4(b)(1), Income Tax Regs. "Generally, the most important factor is the extent of the taxpayer's effort to assess the taxpayer's proper tax liability." Id.

Petitioner asserts that "Confusion over the interpretation of sections 163(h)(3)(B)(ii) and 163(h)(3)(C)(ii) should be sufficient to establish that under section * * * [6664(c)(1)] and Treasury Regulations section 1.6664-4(c), the accuracy-related penalty should not be imposed." Petitioner also claims that "there 2012 U.S. Tax Ct. LEXIS 22">*35 was no reason for the Petitioner to question the conclusions of her tax advisor that Petitioner was acting properly in filing the Petitioner's return."

As stated supra pp. 8-9, we believe that section 163(h)(3)(B)(ii) and (C)(ii) clearly limits deductions for interest paid on a home mortgage to the interest paid on $500,000 of home acquisition indebtedness and $50,000 of home equity indebtedness in the case of a married taxpayer filing separately. As a result, we disagree with petitioner that the requirements of section 6664(c)(1) are satisfied because of "confusion" in the interpretation of section 163(h)(3)(B)(ii) and (C)(ii).

Although petitioner claims to have followed the advice given to her by her tax adviser,⁹ she has made no attempt to establish that the reliance was reasonable. See Freytag v. Commissioner, 89 T.C. 849">89 T.C. 849, 89 T.C. 849">888 (1987), aff'd on another issue, 904 F.2d 1011">904 F.2d 1011 (5th Cir. 1990), aff'd, 501 U.S. 868">501 U.S. 868, 111 S. Ct. 2631">111 S. Ct. 2631, 115 L. Ed. 2d 764">115 L. Ed. 2d 764 (1991); sec. 1.6664-4(b)(1), Income Tax Regs. We have previously held that

for a taxpayer to rely reasonably upon advice so as possibly to negate a section 6662(a) accuracy-related penalty determined by the Commissioner, the taxpayer must prove * * * that the taxpayer meets each 2012 U.S. Tax Ct. LEXIS 22">*36 requirement of the following three-prong test: (1) The adviser was a competent professional 138 T.C. 382">*390 who had sufficient expertise to justify reliance, (2) the taxpayer provided necessary and accurate information to the adviser, and (3) the taxpayer actually relied in good faith on the adviser's judgment. * * *

Petitioner has failed to show substantial authority or a reasonable basis for the position she took on her 2007 tax return. Petitioner has also failed to prove she meets the reasonable cause defense of section 6664(c)(1). As a result, we hold petitioner is liable for the 20% accuracy-related penalty.

We hold that petitioner is not entitled to a deduction for home mortgage interest paid on $1 million of acquisition indebtedness when she filed her tax return as "married filing separately". Rather, petitioner is entitled to a deduction for the interest paid on only $500,000 of home mortgage 2012 U.S. Tax Ct. LEXIS 22">*37 indebtedness plus the interest paid on $50,000 of home equity indebtedness, as conceded by respondent. We further hold that petitioner is liable for a 20% accuracy-related penalty under section 6662(a).

In reaching our holdings herein, we have considered all arguments made, and, to the extent not mentioned above, we conclude they are moot, irrelevant, or without merit.

To reflect the foregoing,

Decision will be entered under Rule 155.