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For purposes of section 6662(a), "negligence” includes a
failure to make a reasonable attempt to comply with the Internal
Revenue Code, and "disregard" includes careless, reckless, or
intentional disregard. Sec. 6662(c); sec. 1.6662-3(b)(1),
Income Tax Regs. Section 6664(c) provides a reasonable cause
exception to the accuracy-related penalty under section 6662.
Petitioner argues that it is within the exception under
section 6664(c). Petitioner argues that it held an honest and
good faith belief about the deductibility of its payments for
legal fees and interest expense based on its reasonable reliance
on MBS to ensure tax compliance. For the same reasons discussed
above, we disagree. We sustain respondent on this issue.
We have considered all of petitioner's arguments for
contrary holdings and, to the extent not addressed above, find
them to be without merit.
To reflect concessions by respondent,
Decision will be entered
under Rule 155.
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