7 Respondent determined that petitioners are liable for an addition to tax for filing their 1990 Federal income tax return after the due date. Section 6651(a)(1) provides for an addition to tax in the amount of 5 percent of the amount of the tax if the failure to file is for not more than 1 month, with an additional 5 percent for each month in which the failure to file continues, not exceeding 25 percent of the tax in the aggregate. The addition to tax is applicable unless it is shown that the failure to file is due to reasonable cause and not willful neglect. Respondent contends that petitioners' 1990 tax return was due on April 15, 1991, and that the return was not filed until August 19, 1991. Petitioners maintain that they had an automatic extension of time to file their tax return. While it is true that petitioner filed an application for an automatic extension of time, respondent contends that the application is invalid because petitioners failed to estimate properly their tax for 1990 when they filed their Form 4868. Sec. 1.6081-4(a)(4), Income Tax Regs. On their application for extension, petitioners estimated their 1990 tax liability, without taking into consideration their gambling losses, to be $13,660. After deducting taxes withheld of $11,847, petitioner remitted a check to the IRS in the amount of $1,813. In the notice of deficiency, respondent determined that petitioners' 1990 tax liability was $13,824. The deficiencyPage: Previous 1 2 3 4 5 6 7 8 Next
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