Maurzal Frias and Teresa Frias - Page 9

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          circumstances.  Neely v. Commissioner, supra.  Disregard includes           
          any careless, reckless, or intentional disregard of rules or                
          regulations.  Sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax Regs.           
               The accuracy-related penalties of section 6662 do not apply            
          with respect to any portion of an underpayment if it is shown               
          that there was reasonable cause for such portion and the taxpayer           
          acted in good faith with respect to such portion.  Sec.                     
          6664(c)(1).  The determination of whether petitioners acted with            
          reasonable cause and in good faith depends upon the pertinent               
          facts and circumstances.  Sec. 1.6664-4(b)(1), Income Tax Regs.             
               Petitioners have conceded that they failed to keep accurate            
          books and records and that they omitted entire sources of income            
          from their tax returns.  Petitioners have offered no evidence               
          that they were not negligent and do not address the issue on                
          brief.  We cannot be sure that petitioners intended to abandon              
          this issue, but in any case respondent's determination of the               
          applicable penalty must be sustained as petitioners have not met            
          their burden of proof on this issue.                                        
               To reflect the foregoing and concessions of the parties,               
                                                  Decision will be entered            
                                             under Rule 155.                          











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