- 8 - original extension request. Federal taxes totaling $12,000 had been withheld from petitioners' income during 1989, but petitioners did not include any additional payment of taxes with their initial 1989 extension application. On their 1989 return, filed in October 1990, petitioners calculated their adjusted gross income to be $268,689.71 and their total tax liability to be $59,903.15. Petitioners failed to offer any evidence that would explain how they computed their tax liability for purposes of the extension request, on which their tax liability was underestimated by more than $47,000. Petitioners argue that reasonable cause existed for their failure to estimate properly because their tax records for 1989 were unavailable due to pending litigation with Mr. Hanna’s former business associate. Inability to obtain information does not generally constitute reasonable cause if taxpayers could have filed a timely return with a reasonable degree of accuracy based on their best knowledge. See Estate of Vriniotis v. Commissioner, 79 T.C. 298, 311 (1982); Electric & Neon, Inc. v. Commissioner, 56 T.C. 1324, 1343 (1971), affd. without published opinion 496 F.2d 876 (5th Cir. 1974). In this case, Mr. Hanna presented no evidence that his law practice income or that Mrs. Hanna’s income had decreased in any amount from prior years, such as 1987 and 1988, when petitioners' adjusted gross income had been $190,280.08 and $254,374.46, respectively. There is also no evidence thatPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011