Barbara Ann Tudyman - Page 38

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          tax return is adequate disclosure under section 6661.  Sec.                   
          1.6661-4(c), Income Tax Regs.  Section 4(a)(5) of Rev. Proc. 89-              
          11, 1989-1 C.B. 797, 798, provides that to adequately disclose a              
          casualty loss for purposes of section 6661, the taxpayer must                 
          complete Form 4684 and attach it to the return.                               
               Petitioner attached Forms 4684 to the amended returns she                
          filed for 1985, 1986, and 1987.  In them, she described her real              
          and personal property loss from the earthquake.  She included a               
          detailed inventory of her personal property that was damaged                  
          or destroyed by the earthquake.  We conclude that petitioner                  
          adequately disclosed her casualty loss on her 1985, 1986,                     
          and 1987 returns.  Rev. Proc. 89-11, sec. 4(a)(5).  Thus, we                  
          hold that petitioner is not liable for the addition to tax under              
          section 6661 for 1985, 1986, and 1987.                                        
               3.   Accuracy-Related Penalty                                            
               Taxpayers are liable for a penalty equal to 20 percent                   
          of the part of the underpayment attributable to negligence or                 
          disregard of rules or regulations.  Sec. 6662(a) and (b)(1).                  
          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).                                                    
               Petitioner bears the burden of proving that she is                       
          not liable for the accuracy-related penalty.  Rule 142(a).                    

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