Forest L. Buckmaster - Page 14

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                  We sustain respondent's determination on this issue.5                                  
            Although petitioner asks us to allow him some deductions to                                  
            offset this income, we decline to do so.  Petitioner must prove                              
            his entitlement to any deduction, and he must keep sufficient                                
            records to substantiate any deduction that he claims.  Sec. 6001;                            
            New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).                                 
            Petitioner has not introduced any evidence to substantiate his                               
            entitlement to any deductions, and the record does not persuade                              
            us that petitioner is entitled to any deductions.                                            
                  Respondent also determined that petitioner was liable for an                           
            accuracy-related penalty under section 6662(a) because he                                    
            substantially understated his Federal income tax.  See sec.                                  
            6662(b)(2).  As relevant herein, section 6662(a) imposes an                                  
            accuracy-related penalty equal to 20 percent of an underpayment                              
            that is due to a substantial understatement of income tax.                                   
            Petitioner will avoid this penalty if the record shows that his                              
            income tax was not understated by the greater of 10 percent of                               
            the tax required to be shown on the return or $5,000.  Sec.                                  
            6662(d)(1)(A).  The accuracy-related penalty of section 6662 is                              
            not applicable to any portion of an underpayment to the extent                               
            that an individual has reasonable cause for that portion and acts                            
            in good faith with respect thereto.  Sec. 6664(c)(1).  Such a                                
            determination is made by taking into account all facts and                                   

                  5 Petitioner has not challenged respondent's determination                             
            that this income is subject to self-employment tax.  We sustain                              
            that determination without further comment.  See Rule 142.                                   

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