- 16 -
The third issue for decision is whether Michael and Bonnie
are liable for the section 6662(a) accuracy-related penalty for
negligence for 1992, 1993, and 1994. Respondent's determinations
of negligence are presumed to be correct, and petitioners bear
the burden of proving that the penalties do not apply. Rule
142(a); Welch v. Helvering, 290 U.S. at 115; Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972).
Section 6662(a) imposes a 20-percent penalty on the portion
of an underpayment attributable to any one of various factors,
one of which is negligence or disregard of rules or regulations.
Sec. 6662(b)(1). Respondent determined that Michael and Bonnie
are liable for the accuracy-related penalty imposed by section
6662(a) for their underpayments of taxes in 1992, 1993, 1994, and
that such underpayments were due to negligence or disregard of
rules or regulations. "Negligence" includes a failure to make a
reasonable attempt to comply with the provisions of the Internal
Revenue laws or to exercise ordinary and reasonable care in the
preparation of a tax return. Sec. 6662(c); 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.
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 of the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011