- 5 - Therefore, we hold that one-half of petitioner's Social Security disability benefits, in the amount of $3,150 is taxable for the year in issue. Sec. 86(a). Petitioners failed to present any evidence contrary to respondent's position. Rule 142(a). Accordingly, respondent is sustained on this issue. The final issue for decision is whether petitioners are liable for the section 6662(a) accuracy-related penalty. Section 6662(a) imposes a 20-percent penalty on the portion of an underpayment attributable to any one of various factors, one of which is negligence. Respondent determined that petitioners are liable for the accuracy-related penalty imposed by section 6662(a), and that the entire underpayment of tax was due to negligence. "Negligence" includes a failure to make a reasonable attempt to comply with the provisions of the Internal Revenue laws or to exercise ordinary and reasonable care in the preparation of a tax return. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. "Disregard" includes any careless, reckless, or intentional disregard of rules or regulations. Sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax Regs. However, section 6664(c)(1) provides that the penalty under section 6662(a) shall not apply to any portion of an underpayment, if it is shown that there was reasonable cause for the taxpayer's position with respect to that portion and that the taxpayer acted in good faith with respect to that portion. Sec. 6664(c)(1). The determination of whether a taxpayer acted withPage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011