- 23 -23
with reasonable cause and in good faith depends upon the
pertinent facts and circumstances. Sec. 1.6664-4(b)(1), Income
Tax Regs.
Petitioners have conceded that they failed to include
significant amounts of miscellaneous income, interest income, and
capital gain income. Petitioners have offered no evidence that
they were not negligent in omitting such items or that they had
reasonable cause to do so. Petitioners have offered no evidence
that they were not negligent or had reasonable cause to deduct
attorney's fees in excess of the amount allowed by respondent or
in failing to include any portion of the $37,898 in taxable
income. In fact, petitioners' briefs fail to address the
negligence issue at all. We cannot be sure that petitioners
intended to abandon the issue, but in any case respondent's
determination of the applicable penalty must be sustained with
respect to the underpayment redetermined herein as petitioners
have not met their burden of proof on this matter. Respondent's
alternative argument for the substantial understatement penalty
is rendered moot by our finding sustaining the negligence
penalty.
To reflect the foregoing and concessions of the parties,
Decision will be entered
under Rule 155.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Last modified: May 25, 2011