- 26 -
Section 6662(a) imposes a penalty in an amount equal to 20
percent of the portion of the underpayment of tax attributable
to one or more of the items set forth in section 6662(b).
Respondent determined that the entire underpayment of
Mr. Ciaravella's tax was due to negligence or intentional
disregard of rules or regulations. Sec. 6662(b)(1). Under the
Treasury Regulations, “The term `negligence’ includes any failure
to make a reasonable attempt to comply with the provisions of the
internal revenue laws”. Sec. 1.6662-3(b)(1), Income Tax Regs.
“Disregard” includes any careless, reckless, or intentional
disregard of rules or regulations. Sec 6662(c); sec. 1.6662-
3(b)(2), Income Tax Regs.
The accuracy-related penalty does not apply to any portion
of an underpayment as to which the taxpayer acted with reasonable
cause and good faith. Sec. 6664(c)(1). Such a determination is
made by taking into account all facts and circumstances,
including the taxpayer's experience, knowledge, and education, as
well as reliance on a tax adviser. Sec. 1.6664-4(b)(1), Income
Tax Regs. Petitioner bears the burden of proving that
respondent's imposition of a penalty under section 6662 is
erroneous. ASAT, Inc. v. Commissioner, 108 T.C. 147 (1997).
Petitioner argues that he relied on the advice of a tax
professional to prepare his tax returns for the years in issue.
Reliance on a tax professional is not an absolute defense but is
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011