James E. Copley and Cynthia R. Copley - Page 19

          equal to 20 percent of the portion of any underpayment of tax               
          that is due to negligence.  Under section 6662(c), negligence is            
          any failure to make a reasonable attempt to comply with the                 
          provisions of the Code.                                                     
               Based on petitioners' amended returns filed after the notice           
          of deficiency was issued and immediately before trial, wherein              
          they adjusted the amount of nearly every item of expense claimed            
          on their original returns, and based on petitioners' failure to             
          provide credible substantiation or authority for any of the items           
          at issue in this case, we find that petitioners are liable for              
          the penalty under section 6662(b)(1) for 1990.  Respondent is               
          sustained on this issue.                                                    
               At trial, petitioner made an oral motion for discovery                 
          requesting copies of the revenue agent's workpapers resulting               
          from the administrative examination of his 1988 and 1989 Federal            
          income tax returns.  Petitioner also sought an explanation as to            
          why his returns were selected for examination.  Under Rule                  
          70(b)(1), information sought through discovery may concern any              
          matter not privileged and which is relevant to the subject matter           
          involved in the pending case.  However, discovery "shall be                 
          completed, unless otherwise authorized by the Court, no later               
          than 45 days prior to the date set for call of the case from a              
          trial calendar."  Rule 70(a)(2).  This case was first called for            
          trial on May 12, 1994.  Petitioner did not move for discovery               
          until the case was recalled for trial at a special session held             

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