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valuation misstatement. Sec. 6662(b)(1)-(3). The term
"underpayment of tax" is defined by section 6664(a) to mean, as
relevant herein, the amount by which the income tax imposed by
law exceeds the amount of income tax reported by the taxpayer on
the taxpayer's income tax return.
Also as relevant herein, the accuracy-related penalty does
not apply with respect to any portion of the underpayment if it
is shown that there was reasonable cause for such portion and
that the taxpayer acted in good faith with respect to such
portion. Sec. 6664(c)(1). The determination of whether a
taxpayer acted with reasonable cause and in good faith is made on
a case-by-case basis, taking into account all the pertinent facts
and circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs. The
most important factor is the extent of the taxpayer's effort to
assess the taxpayer's proper tax liability for the year. Id.
Petitioner bears the burden of proving that respondent's
determination of the accuracy-related penalty is erroneous. Rule
142(a); INDOPCO Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Moreover, in
evaluating evidence, the Court is not bound to accept as gospel,
the unverified and undocumented testimony of a taxpayer.
Tokarski v. Commissioner, 87 T.C. 74, 77 (1986); Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976).
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