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respect to the allowance of exemption deductions for the two
dependents as follows:
Under Code section 151(e) it says no exemptions
shall be allowed under this section with respect to any
individual unless the taxpayer identification number of
such individual is included in the return claiming the
exemption. Our position is that without returns filed,
Mr. Porter doesn't get the benefit of claiming the
exemptions.
Although respondent's counsel accurately recited the current
rule of law provided in section 151(e), such rule was not
effective during the taxable years in issue. Small Business Job
Protection Act of 1996, Pub. L. 104-188, sec. 1615(d), 110 Stat.
1755, 1853. Accordingly, we hold that petitioner is entitled to
dependency exemption deductions for his two sons for 1992, 1993,
1994.
The fourth issue for decision is whether petitioner is
liable for the section 6651(a)(1) additions to tax for failure to
file his 1992, 1993, and 1994 returns.
Section 6651(a)(1) imposes an addition to tax for failure to
file timely returns, unless the taxpayer establishes that such
failure is due to reasonable cause and not due to willful
neglect. "Reasonable cause" requires the taxpayer to demonstrate
that he exercised ordinary business care and prudence and was
nonetheless unable to file a return within the prescribed time.
United States v. Boyle, 469 U.S. 241, 245-246 (1985). "Willful
neglect" means a conscious, intentional failure or reckless
indifference. Id. at 245. The addition to tax equals 5 percent
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