J. Michael Joly and Bonnie B. Joly, Jody Steven Joly, and David Andrew Joly - Page 17

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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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