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underpayment 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
his proper tax liability for the year. Id.
Based on the record, we find that Michael and Bonnie have
not proved that their underpayments were due to reasonable cause
or that they acted in good faith. We hold that Michael and
Bonnie are liable for the section 6662(a) accuracy-related
penalty for 1992, 1993, and 1994.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011