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251; Estate of La Meres v. Commissioner, 98 T.C. 294, 320,
324-325 (1992); see also sec. 301.6651-1(c)(1), Proced. & Admin.
Regs. (reasonable cause exception for section 6651(a)(1) and
(2) requires an exercise of ordinary business care and prudence).
A taxpayer may establish reasonable cause for a late payment when
the taxpayer "exercised ordinary business care and prudence in
providing for payment of his tax liability and was nevertheless
either unable to pay the tax or would suffer an undue hardship
* * * if he paid on the due date." Sec. 301.6651-1(c)(1),
Proced. & Admin. Regs.
The estate asserts that Ms. Midgorden relied reasonably on
Mr. Thorsen in that he advised her that the return was not due
until 18 months after the date the decedent died. Alternatively,
the estate argues that the additions to tax apply only to its tax
liability that exceeds $225,400. Under the alternative argument,
it is alleged that Ms. Midgorden had reasonable cause for not
filing the return or paying the tax up until the date that she
was told that the return was late, and, on that date, the estate
made an estimated payment of $225,400 to the Commissioner. The
alternative argument asserts that the additions to tax should be
based on the estate's actual tax liability less $225,400, because
additions to tax under section 6651(a) are computed on the net
tax due.
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