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disregard of rules or regulations. Sec. 6662(c); sec.
1.6662-3(b)(2), Income Tax Regs.
Section 6664(c)(1), however, provides that the penalty under
section 6662(a) shall not apply to any portion of an
underpayment, if it is shown that there was reasonable cause for
the taxpayer's position with respect to that portion and that the
taxpayer acted in good faith with respect to that portion. The
determination of whether a taxpayer acted with reasonable cause
and in good faith is made on a case-by-case basis, taking into
account all the pertinent facts and circumstances. Sec.
1.6664-4(b)(1), Income Tax Regs. The most important factor is
the extent of the taxpayer's effort to assess her proper tax
liability for the year. Id.
After reviewing the record and considering our holdings on
the claimed deductions, we find that petitioner has proved that
she acted in good faith with respect to her underpayment of tax.
The record shows that she made a reasonable effort to assess her
proper tax liability. Accordingly, we hold that petitioner is
not liable for the section 6662(a) accuracy-related penalty for
1992.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011