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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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Last modified: May 25, 2011