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sec. 1.6662-3(b)(1), Income Tax Regs. Moreover, negligence is
the failure to exercise due care or the failure to do what a
reasonable and prudent person would do under the circumstances.
Neely v. Commissioner, 85 T.C. 934, 947 (1985). Disregard
includes any careless, reckless, or intentional disregard of
rules or regulations. Sec. 6662(c); sec. 1.6662-3(b)(2), Income
Tax Regs.
Under section 6664(c), no penalty will be imposed with
respect to any portion of any underpayment if it is shown that
there was a reasonable cause for such portion and that the
taxpayer acted in good faith with respect to such portion. This
determination is based on all of the facts and circumstances.
Sec. 1.6664-4(b)(1), Income Tax Regs. The most important factor
is the extent of the taxpayers' effort to assess their proper tax
liability for the years at issue. Sec. 1.6664-4(b)(1), Income
Tax Regs.
On the record before us, we sustain respondent's
determination of penalties under section 6662(a). Petitioners
wrote checks for which they left the payee lines blank and
claimed those purported contributions as charitable contribution
deductions. Petitioners claimed deductions in the amounts of
$16,176.48 and $17,940.00 for 1991 and 1992, respectively.
However, the documents that petitioners provided to support their
claimed deductions showed an amount less than that claimed.
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Last modified: May 25, 2011