- 19 -
Beginning Ending
Inventory Inventory
Crystal (horse) -0- -0-
Midnight (horse) -0- -0-
Rags (horse) -0- $600
Winston (horse) -0- -0-
Sparky (dog) $150 150
Wanda (dog) 200 200
Buddy (dog) 220 220
Bubbles -0- -0-
2 pups -0- -0-
Total 570 1,170
Since petitioner substantiated $2,100 of materials and supplies
and $600 of purchases, her total allowable costs for 1993 are
$2,100 ($2,100 + 600 + (570 - 1,170)).
Section 6662(a) Accuracy-Related Penalty
Section 6662(a) imposes a penalty in an amount equal to 20
percent of the portion of the underpayment of tax attributable to
one or more of the items set forth in section 6662(b), such as
negligence or disregard of rules or regulations. Respondent
determined that the entire underpayment of petitioner's tax was
due to negligence or intentional disregard of rules or
regulations. Sec. 6662(b)(1). As is the case of the predecessor
section covering the addition to tax for negligence, section
6653(a), petitioner bears the burden of proof on the penalties in
issue. Rule 142(a); Neely v. Commissioner, 85 T.C. 934, 947
(1985). Negligence includes a failure to make a reasonable
attempt to comply with the provisions of the internal revenue
laws. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs.
Negligence is the failure to exercise due care or the failure to
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