Ellwest Stereo Theatres of Memphis, Inc., et al. - Page 18

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            their belated efforts to comply with the law after the errors                                  
            were discovered.  They believe this conduct attests to their good                              
            faith and militates against an inference of willful neglect.                                   
            According to Revenue Agent Petzold’s uncontroverted testimony,                                 
            Shindel presented to her in 1993 a summary of payments for prior                               
            years.  Shindel testified that he could not recall whether the                                 
            payment summary was given to Petzold before or after she                                       
            uncovered evidence of the payments herself and questioned him                                  
            about them.  She testified that it was she who raised the issue                                
            first.  Compliance efforts made years after the obligations arose                              
            and only after prompting by an examining agent are not                                         
            inconsistent with the inference that the original failure to                                   
            comply was due to willful neglect.                                                             
                  We conclude that petitioners have not shown that their                                   
            failure to file returns and deposit tax for the years at issue                                 
            was due to reasonable cause and not due to willful neglect.                                    
            Accordingly, we sustain respondent’s determination that they are                               
            liable for additions to tax under sections 6651(a)(1) and                                      
            Additions to Tax Under Section 6653(a)                                                         
                  Respondent determined that petitioners are liable for the                                
            additions to tax under section 6653(a).  For the taxable years at                              
            issue section 6653(a) provided for an addition to tax if any part                              
            of an underpayment of tax is due to negligence or intentional                                  
            disregard of rules or regulations.  For taxable years 1981                                     

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