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Section 6651(a)(1) imposes an addition to tax for failure to file
timely a tax return unless it is shown that such failure is due
to reasonable cause and not willful neglect. A taxpayer can
establish reasonable cause by showing that, despite the exercise
of ordinary care and prudence, the taxpayer was unable to file
the required tax return within the prescribed time. United
States v. Boyle, 469 U.S. 241, 246 (1985); Crocker v.
Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-1(c)(1),
Proced. and Admin. Regs. Willful neglect has been defined as a
conscious, intentional failure or reckless indifference to timely
filing a return. United States v. Boyle, supra at 245.
Petitioners have the burden of proof. Rule 142(a).
It is undisputed that petitioners did not timely file their
individual tax return for taxable year 1990. Petitioners argue
that they had no expectation that any tax was due, because JDB’s
business was not profitable.
We conclude that petitioners have not met their burden of
proof. An unverified belief that no taxes are owing does not
constitute reasonable cause of the sort that will allow
petitioners to escape the addition to tax pursuant to section
6651(a)(1). Olsen v. Commissioner, T.C. Memo. 1993-432, and
cases cited therein. The question is not whether petitioners
thought that they owed tax, but whether they knew or should have
known that they needed to file a return. Jackson v.
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Last modified: May 25, 2011