Robert A. Stanford and Susan Stanford - Page 21

                                       - 21 -                                         
          failure to timely file income tax returns by the due date of the            
          returns unless that failure is due to reasonable cause.  To                 
          establish reasonable cause, taxpayers must show that they                   
          exercised ordinary business care and prudence but were still                
          unable to file their returns by the due date.  Sec. 301.6651-               
          1(c)(1), Proced. & Admin. Regs.  Whether the untimely filing of             
          tax returns is due to reasonable cause raises a question of fact.           
          Denenburg v. United States, 920 F.2d 301, 303 (5th Cir. 1991).              
               Section 6662(d) imposes a penalty for substantial                      
          understatements of tax but provides that the amount of any                  
          understatements shall be reduced by that portion that is                    
          attributable to either (1) the tax treatment of any item for                
          which there was substantial authority or (2) any item if the                
          relevant facts affecting the item's tax treatment are adequately            
          disclosed in the returns or in statements attached to the                   
          returns.  Sec. 6662(d)(2)(B).                                               
               Petitioners argue that the delay in filing their 1990 joint            
          Federal income tax return was due to reasonable cause based on              
          the destruction by Hurricane Hugo of records of Guardian Bank,              
          Guardian Services, and Stanford Financial that were necessary to            
          properly prepare and file their 1990 joint Federal income tax               
          return and that extra time was needed to reconstruct these                  
               Petitioners, however, offer no argument regarding the                  
          4-month delay between November 5, 1991, the day they signed their           

Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011