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substantiating these alleged expenditures. Respondent’s
determinations are sustained.
Penalties Under Section 6662(a)
As relevant here, section 6662(a) imposes a penalty in the
amount of 20 percent of the underpayment due to, inter alia,
negligence or substantial understatement of tax. Negligence
includes “any failure to make a reasonable attempt to comply with
the provisions of” the revenue laws and any failure to keep
adequate books and records or to substantiate items properly.
Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. We find that
there was no reasonable attempt to comply.8 Petitioner-husband
prepared the returns using information supplied by petitioner.
Petitioners failed to comply with the substantiation requirements
of section 274. Petitioners claimed double deductions for
mortgage interest in 2000 and, in essence, for automobile
expenses in 1999. Putting aside the section 280A failure to
substantiate the business use of any portion of the home, the
amounts claimed for utilities were, at best, fanciful, and the
same may be said for the claims of the mileage driven.
Respondent’s determinations of the accuracy-related penalties
under section 6662(a) are sustained.
8 Respondent has satisfied his burden of production with
respect to the penalties. Sec. 7491(c).
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