Clarence A. Hunt, Jr. - Page 8

                                                 - 8 -                                                    

            would do under like circumstances.  Neely v. Commissioner, 85                                 
            T.C. 934 (1985).  The term "negligence" includes any failure to                               
            make a reasonable attempt to comply with the provisions of the                                
            Internal Revenue laws, and the term "disregard" includes any                                  
            careless, reckless, or intentional disregard of rules or                                      
                  Section 6662(b)(2) provides that section 6662 shall apply to                            
            any portion of the underpayment attributable to any substantial                               
            understatement of income tax.  There is a substantial                                         
            understatement of income tax if the amount of the understatement                              
            exceeds the greater of (1) 10 percent of the tax required to be                               
            shown on the return, or (2) $5,000.  Sec. 6662(d)(1)(A).  For                                 
            purposes of section 6662(d)(1), "understatement" is defined as                                
            the excess of tax required to be shown on the return over the                                 
            amount of tax that is shown on the return reduced by any rebates.                             
                  Petitioner improperly claimed on his 1990 Federal income tax                            
            return a $22,100 net loss from his horse racing activity.                                     
            Furthermore, petitioner presented no evidence to establish that                               
            he was not negligent or did not disregard rules or regulations.                               
            The Court concludes that petitioner was negligent or in disregard                             
            of rules or regulations for purposes of section 6662(b)(1).                                   
            Petitioner has not established that any of the reductions under                               
            section 6662(d)(2)(B) would apply to show that he did not have a                              
            substantial understatement of income tax for 1990 for purposes of                             

Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011