- 20 - Petitioners bear the burden of showing that there was reasonable cause for, and that they acted in good faith with respect to, a portion of an underpayment. Rule 142. As to the portion of the penalty determined by respondent with respect to the adjustment of petitioners' deduction of advertising expenses, petitioners make the following argument: Since the petitioner has demonstrated to the court that he did not engage in careless, reckless, or intentional disregard of any existing statute, and since the respondent has been unable to prove that the petitioner acted in any manner other than in good faith, the petitioner submits that the penalties should not apply. Based upon Dr. Remy's testimony, it is evident that he attempted to research the tax law to find authority for his position that the amount of his noncompensated telephone services is deductible. It is also evident that he took steps to accurately document the extent of his telephone services by maintaining a log. However, this is not enough to be relieved of the accuracy-related penalty. Section 6664(c)(1) requires "a reasonable cause". In this case, petitioners have not shown that the underpayment attributable to the deductions in question was due to reasonable cause. To the contrary, we cannot findPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011