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1996. On December 6, 1996, the Court filed respondent's Motion
for Claim for Damages Under I.R.C. � 6673, contending that
petitioners' position in the case was frivolous or groundless.
Taxpayers bear the burden of proving that respondent's
determinations of deficiencies and penalties are erroneous. Rule
142(a). Petitioners have introduced no evidence to support their
entitlement to the deductions they claimed. While Mr. Tilley
testified that he had relied on an accountant to ensure that the
returns were correct, petitioners introduced no evidence to
establish that such reliance was reasonable. See sec. 6664(c);
sec. 1.6664-4(b), Income Tax Regs. As a result, we conclude that
petitioners have failed to meet their burden of proof, and they
are liable for the deficiencies and accuracy-related penalties as
determined by respondent.
Respondent filed a motion for the imposition of a penalty
under section 6673(a)(1). We conclude that such a penalty is
inappropriate in the present case and deny respondent's motion.
To reflect the foregoing,
An appropriate order and
decision will be entered.
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