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with reasonable cause and in good faith depends upon the
pertinent facts and circumstances. Sec. 1.6664-4(b)(1), Income
Tax Regs. The most important factor is the extent of the
taxpayers' effort to assess their proper tax liability for the
taxable year. Id. Although we found that petitioners' failure
to timely file their 1990 return was due to reasonable cause, we
find that the record fails to establish that petitioners acted
with reasonable cause and in good faith in assessing whether
petitioner's distribution from her profit sharing plan was
taxable. Petitioners offered no evidence that they made a good
faith effort to assess their proper tax liability. Based on this
record, we conclude that petitioners are liable for the section
6662 accuracy-related penalty as determined by respondent.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011