Estate of Carolyn W. Holland, Deceased, Jack K. Holland, Lewis G. Holland, Sr., and Betty H. Kann, Executors - Page 64

                                        -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.                                                            


Page:  Previous  49  50  51  52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  68  Next

Last modified: May 25, 2011