Terry Duane Beall and Joyce Engel Beall - Page 24

                                       - 24 -                                         

          disregard."  Sec. 6662(b).  A taxpayer has the burden of proving            
          that the Commissioner's determination of an addition to tax is in           
          error.  Luman v. Commissioner, 79 T.C. 846, 860-861 (1982).                 
               The accuracy-related penalty of section 6662 does not apply            
          to any portion of an underpayment if there was reasonable cause             
          for such portion and the taxpayer acted in good faith.  Sec.                
          6664(c)(1).  The most important factor is the extent of the                 
          taxpayer's efforts to assess his proper tax liability for the               
          year.  Sec. 1.6664-4(b)(1), Income Tax Regs.  Such a                        
          determination is made by taking into account all facts and                  
          circumstances, including the experience, knowledge, and education           
          of the taxpayer.  Id.  Reliance by the taxpayer on the advice of            
          a qualified adviser will constitute reasonable cause and good               
          faith if, under all of the facts and circumstances, such reliance           
          was reasonable and the taxpayer acted in good faith.  Id.                   
               On their 1989 Federal income tax return, petitioners                   
          reported no gain from the sale on 20 The Point, rolling over a              
          gain of $341,710.  Later, petitioners agreed to the revenue                 
          agent's recalculation of gain to be $503,250.                               
               Petitioners assert that they believed they were entitled to            
          the benefits of section 1034; yet they presented little evidence            
          to support their belief.  Petitioners argue that their actions in           
          establishing 20 The Point as their principal residence and making           
          the subsequent sale were in "ignorance" of the existence of the             
          Internal Revenue Code provisions.                                           

Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011