David W. Chiu - Page 24

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            exercised ordinary business care and prudence, but nevertheless                              
            was unable to file the return within the prescribed time.  Sec.                              
            301.6651-1(c)(1), Proced. & Admin. Regs.; see also United States                             
            v. Boyle, supra at 246.  Petitioner relies on two arguments to                               
            establish reasonable cause.                                                                  
                  First, petitioner claims that he based his decision not to                             
            file on brochures he acquired before leaving the United States.                              
            Petitioner described one of the brochures as covering U.S.                                   
            citizens living abroad and advising of an exemption from filing                              
            for such citizens making less than $70,000 per year.  Petitioner                             
            has not produced the brochure.  We take judicial notice of                                   
            Internal Revenue Publication 54 entitled "Tax Guide for U.S.                                 
            Citizens and Resident Aliens Abroad".  Publication 54 states                                 
            clearly that an individual must file a return in order to claim a                            
            $70,000 exemption (available under section 91118) and also that                              
            the exemption applies only to foreign earned income.  Without                                
            more, we conclude that petitioner's testimony regarding the                                  
            brochure fails to establish reasonable cause.                                                
                  Second, petitioner claims that he based his decision not to                            
            file on advice he received from the U.S. consulate in Hong Kong                              
            that a return was not required if his income was less than                                   

                  18Subject to certain limitations and restrictions, sec. 911                            
            allows a citizen or resident of the United States living abroad                              
            to exclude from gross income up to $70,000 in foreign earned                                 
            income.  Sec. 911(a)(1), (b)(2)(A).                                                          

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