- 9 -
underpayment to which section 6662 applies. Under section
6664(c), no penalty shall be imposed under section 6662(a) with
respect to any portion of an underpayment if it is shown that
there was a reasonable cause for such portion, and that the
taxpayer acted in good faith with respect to such portion.
Section 6662(b)(1) provides that section 6662 shall apply to
any underpayment attributable to negligence or disregard of rules
or regulations. Section 6662(c) provides that the term
"negligence" includes any failure to make a reasonable attempt to
comply with the provisions of the Internal Revenue laws, and the
term "disregard" includes any careless, reckless, or intentional
disregard of rules or regulations. Negligence is the lack of due
care or failure to do what a reasonable and ordinarily prudent
person would do under the circumstances. Neely v. Commissioner,
85 T.C. 934, 947 (1985). It is well established that the
taxpayer bears the burden of proof on this issue. Bixby v.
Commissioner, 58 T.C. 757, 791 (1972).
Petitioners have not met their burden of proof on this
issue. Section 280A(c)(1) explicitly provides that the deduction
for home office expenses applies only to a portion of a home used
exclusively for a trade or business. Such expenses are not
allowed if the portion of the home is used for any nonqualifying
purpose. Several cases have interpreted section 280A(c)(1) in
this manner and have elaborated on differing factual situations
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011