9
The second issue for decision is whether petitioner is
liable for a penalty under section 6662(a). This section, in
conjunction with subsection (b)(1), imposes an accuracy-related
penalty 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 Internal Revenue Code.
Petitioner failed to maintain regular and consistent records
of his activities, attempted to deduct personal items under the
guise of "business expenses", failed to substantiate a portion of
the deductions claimed, and misrepresented the purpose behind the
expenditures at trial. On this record, we conclude that
petitioner was negligent within the meaning of section 6662(b)(1)
with respect to the entire underpayment of tax and is liable for
an accuracy-related penalty under section 6662(a). Respondent is
sustained on this issue.
To reflect the foregoing,
Decision will be entered
for respondent.
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