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with respect to any portion of any underpayment if it is shown
that there was a reasonable cause for such portion and that the
taxpayer acted in good faith with respect to such portion. Sec.
6664(c).
On the basis of this record, we conclude that petitioners
are liable for an accuracy-related penalty under section 6662(a).
Petitioners failed to report interest income in the amount of
$752 as required. Further, petitioners failed to establish with
adequate records the claimed $32,500 ordinary loss deduction. In
fact, petitioners failed to provide any reasonable explanation or
documentary evidence to support their entitlement to the
deduction. In this regard, we find that petitioners' actions
were not those of a reasonable and prudent person under the
circumstances. Accordingly, we sustain respondent's
determination on this issue.
Decision will be entered
for respondent.
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Last modified: May 25, 2011