-60-
determination. Mr. Wood testified that, to the best of his
recollection, this check represented payment to petitioner for
expenses and time incurred by petitioner in helping Mr. Wood's
law firm with a case. Absent any evidence to the contrary,
respondent's determination that petitioners failed to report $535
of taxable income in 1991 will be sustained.
Section 6651(a)(1) Addition to Tax
Respondent determined that petitioners are liable for the
section 6651(a) addition to tax for 1990 and 1991. Section
6651(a)(1) imposes an addition to tax for failure to file timely
a return, unless the taxpayer establishes that the failure to
file did not result from "willful neglect" and that the failure
was due to "reasonable cause". "Willful neglect" has been
interpreted to mean a conscious, intentional failure or reckless
indifference. United States v. Boyle, 469 U.S. 241, 245-246
(1985). "Reasonable cause" requires taxpayers to demonstrate
that they exercised ordinary business care and prudence and were
nonetheless unable to file a return within the prescribed time.
Id. at 246; sec. 301.6651-1(c)(1), Proced. & Admin. Regs. The
addition to tax equals 5 percent of the tax required to be shown
on the return for the first month, with an additional 5 percent
for each additional month or fraction of a month during which the
failure to file continues, not to exceed a maximum of 25 percent.
Sec. 6651(a)(1).
Page: Previous 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 NextLast modified: May 25, 2011