-64-
Regs. In Notice 90-20, 1990-1 C.B. 328, the Commissioner
provided guidance on which taxpayers may rely with respect to the
negligence portions of the accuracy-related penalty imposed under
section 6662(b)(1). According to the Notice, if the disclosure
was made on the return, the return had to contain the caption
"DISCLOSURE MADE UNDER SECTION 6662" at the top of the left
corner of the return and the caption had to refer to the page or
line number containing the disclosure.26 Id. at 329.
Furthermore, the disclosure had to be full and substantive and be
clearly identified as being made to avoid imposition of the
accuracy-related penalty. Id.
In addition to deciding whether petitioner's position on
each of the erroneously reported items was adequately disclosed,
we must also find that the position was not frivolous, and that
petitioner had adequate books and records and substantiated items
properly.
The Deduction for the $120,000 of Incomplete Gifts
We find that petitioner's position with respect to the
deduction for $120,000 of incomplete inter vivos gifts was
25(...continued)
adequate, we note that the provisions of sec. 1.6662-4(f)(2),
Income Tax Regs., which permit disclosure in accordance with
annual revenue procedures for purposes of the substantial
understatement penalty, do not apply for purposes of the penalty
for negligence or disregard of rules or regulations. Sec.
1.6662-3(c)(2), Income Tax Regs.
26 Petitioner's Form 706 did not contain the required
caption. However, assuming noncompliance with the notice in this
regard is not outcome determinative, we consider the substance of
the disclosures.
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