Donald S. Hazelton - Page 15

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          return for 1992 and had not made estimated tax payments that                
          year.  Petitioner's written protest admitted that he had failed             
          to file a return and make estimated tax payments but did not                
          adequately substantiate with documentary evidence that these                
          failures to file the return were due to reasonable cause.                   
          Petitioner admitted further in his written protest that he had              
          received income during 1992 in amounts different from that which            
          respondent calculated in the 30-day letter, but he failed to                
          substantiate with documentary evidence the amounts of income he             
          admitted receiving and failed to provide additional documentary             
          evidence to support the deductions and exemptions to which he               
          claimed he was entitled.                                                    
               Respondent's position on the date of the notice of                     
          deficiency was that petitioner had unreasonably failed to file a            
          Federal income tax return for 1992, had failed to pay estimated             
          taxes, had failed to report income received by him during 1992,             
          and had failed to substantiate deductions and exemptions to which           
          he claimed he was entitled.  Respondent's position on that date             
          was clearly justified to a degree that could satisfy a reasonable           
          person, and, thus, respondent was substantially justified in the            
          context of Lennox v. Commissioner, supra, Pierce v. Underwood,              
          supra, and Powers v. Commissioner, 100 T.C. 457 (1993).                     
          Consequently, respondent's position on the date the notice of               
          deficiency was issued was substantially justified.                          





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