- 7 - section 6662(b)(1) and (c) includes "any failure by the taxpayer to keep adequate books and records". Sec. 1.6662-3(b)(1), Income Tax Regs. There is no requirement that a taxpayer maintain any specific type of ledger or journal, so long as his overall recordkeeping is sufficient to establish the amount of his income. Petitioner's business required travel to such an extent that he essentially worked out of his automobile. In the circumstances, we are not persuaded that respondent's insistence on ledgers is realistic or appropriate. Petitioner's method of retaining his invoices in paid and unpaid categories was apparently "adequate" for 1991, as the parties have now stipulated that there was no underreporting of gross receipts in that year. As for 1990, petitioner failed to report $12,911 of a total of $242,788 in gross receipts. While the unreported amount is not inconsequential, we are not persuaded that it constitutes either "negligence", which includes "any failure to make a reasonable attempt to comply with the provisions" of the Internal Revenue Code, or "disregard of rules or regulations", which includes "any careless, reckless, or intentional disregard". Sec. 6662(c). We believe that petitioner was making a reasonable, though flawed, attempt to keep track of his gross receipts in the circumstances. Respondent's reliance on Sindik v. Commissioner, supra, is misplaced. The taxpayer in that case kept no records at all, which we found was a failure to make any reasonable attempt to comply and therefore negligent. Here, wePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011