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the 7.5-percent payment to Weisel (or the Weisel payment to
petitioner) was in consideration for any settlement by petitioner
of a claim for damages on account of personal injuries.
II. Section 6662 Penalty
Section 6662(a) imposes a penalty in the amount of
20 percent of any portion of an underpayment of tax required to
be shown on a return that is attributable to one or more factors
listed in section 6662(b). Those factors include negligence or
disregard of rules or regulations and any substantial
understatement of income tax. The term “negligence” includes
“any failure to make a reasonable attempt to comply with the
provisions” of the Code, and the term “disregard” includes “any
careless, reckless, or intentional disregard.” Sec. 6662(c).
Section 6662(d)(1)(A) provides that there is a substantial
understatement of income tax if the amount of the understatement
exceeds the greater of 10 percent of the tax required to be shown
on the return for the taxable year or $5,000. Petitioner has the
burden of proving that respondent’s determination under section
6662(a) is incorrect. Rule 142(a).
Petitioner has failed to submit any evidence or argument
with respect to respondent's determination that petitioner is
liable for the penalty pursuant to section 6662(a), except for
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Last modified: May 25, 2011