Ellwest Stereo Theatres of Memphis, Inc., et al. - Page 11

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            25 percent.  An addition to tax is imposed under section 6656(a)                               
            for failure to make timely deposit of tax with a Government                                    
            depositary, unless it is shown that such failure was due to                                    
            reasonable cause and not due to willful neglect.  For additions                                
            to tax assessed after October 21, 1986, the amount of the                                      
            addition under section 6656(a) is 10 percent of the underpayment.                              
            Sec. 6656(a).  For deposits required to be made after                                          
            December 31, 1989, the addition is 10 percent of the underpayment                              
            in cases where the delinquency persists for 15 days or more.                                   
            Sec. 6656(b)(1)(A)(iii).                                                                       
                  For purposes of both sections, the delinquency is due to                                 
            reasonable cause if the taxpayer exercised ordinary business care                              
            and prudence but was nevertheless unable to perform its tax                                    
            obligations in timely manner.  Brewery v. United States, 33 F.3d                               
            589, 592 (6th Cir. 1994); In re Biomaterials Corp., 954 F.2d 919,                              
            923 (3d Cir. 1992); Housden v. Commissioner, T.C. Memo. 1992-91;                               
            sec. 301.6651-1(c)(1), Proced. & Admin. Regs.  The delinquency is                              
            due to willful neglect if it resulted from a conscious decision                                
            or from reckless indifference.  United States v. Boyle, 469 U.S.                               
            241, 245 (1985).  The plain language of the proviso in both                                    
            sections 6651(a)(1) and 6656(a) requires that reasonable cause                                 
            and the absence of willful neglect be established as of the time                               
            that performance of the relevant obligation was due.                                           
            See Industrial Indemnity v. Snyder, 54 AFTR 2d 84-5127, 84-1 USTC                              
            par. 9507 (E.D. Wash. 1984).  Thus, whether the taxpayer acts in                               

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