Preston L. and Ruby M. Payton - Page 9

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              On this record, we conclude that petitioners are liable for            
          an addition to tax under section 6651(a)(1) for failure to timely           
          file their 1993 return.  Petitioners failed to establish that               
          they timely filed their 1993 return.  In fact, the stipulation is           
          to the contrary.  Petitioners did not establish that failure to             
          timely file was due to reasonable cause and not willful neglect.            
          Thus, petitioners are liable for the section 6651(a)(1) addition            
          to tax for 1993.                                                            
               Finally, we must decide whether petitioners are liable for             
          accuracy-related penalties for 1993 and 1994.  Section 6662(a)              
          imposes an accuracy-related penalty in the amount of 20 percent             
          of the portion of an underpayment of tax attributable to                    
          negligence or disregard of rules or regulations.  Sec. 6662(a)              
          and (b)(1).  Negligence is any failure to make a reasonable                 
          attempt to comply with the provisions of the internal revenue               
          laws.  Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs.                  
          Moreover, negligence is 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             





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