Melvin J. Laney and Carolyn A. Laney - Page 42

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            Commissioner, 98 T.C. 590 (1992); LTV Corp. v. Commissioner, 64                           
            T.C. 589 (1975).                                                                          
                  We hold that petitioners are entitled to deduct $3,000                              
            against ordinary income for each of the years before us, on                               
            account of their capital loss carryover to these years.                                   
                                      III. Additions to Tax                                           
            A. Section 6651(a)(1)                                                                     
                  Section 6651(a)(1)15 imposes an addition to tax of 5 percent                        
            per month (with a maximum of 25 percent) in case of failure to                            
            file a timely income tax return, unless it is shown that this                             
            failure is due to reasonable cause and not due to willful                                 
            neglect.  Petitioners have the burden of proving error in                                 
            respondent’s determination that this addition to tax should be                            


                  15    Sec. 6651(a) provides, in pertinent part, as follows:                         
                  SEC. 6651.  FAILURE TO FILE TAX RETURN OR TO PAY TAX.                               
                        (a) Addition to the Tax.--In case of failure--                                
                              (1) to file any return required under                                   
                        authority of subchapter A of chapter 61 * * *                                 
                        on the date prescribed therefor (determined                                   
                        with regard to any extension of time for                                      
                        filing), unless it is shown that such failure                                 
                        is due to reasonable cause and not due to                                     
                        willful neglect, there shall be added to the                                  
                        amount required to be shown as tax on such                                    
                        return 5 percent of the amount of such tax if                                 
                        the failure is for not more than 1 month,                                     
                        with an additional 5 percent for each                                         
                        additional month or fraction thereof during                                   
                        which such failure continues, not exceeding                                   
                        25 percent in the aggregate;                                                  




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