Marian and Halina Januszewski - Page 11

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          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.  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.  Sec. 6664(c).                                
               On the basis of this record, we conclude that petitioners              
          are liable for an accuracy-related penalty under section 6662(a).           
          Petitioners claimed deductions for which they failed to maintain            
          adequate records.  Moreover, petitioners failed to provide any              
          valid explanation or credible documentary evidence to support               
          their entitlement to those deductions.  In this regard, we find             
          that petitioners' actions were not those of a reasonable and                
          prudent person under the circumstances.  Accordingly, we sustain            
          respondent's determination on this issue.                                   
               We have considered all arguments made by petitioners and to            
          the extent not discussed, we find them to be irrelevant or                  
          without merit.                                                              
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             under Rule 155.                          





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