Karen L. Thorpe - Page 13

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          Salvation Army receipts on the original cost of the items.                  
          Petitioner did not provide any evidence of the fair market value            
          of the property at the time of the alleged contributions.                   
          Because petitioner assigned original cost values to all the items           
          rather than fair market value at the time the items were donated            
          as required by section 1.170A-1(c), Income Tax Regs., petitioner            
          has not established entitlement to a deduction for any of the               
          items listed on the AMVETS or Salvation Army receipts.                      
               Respondent determined that petitioner is liable for                    
          accuracy-related penalties under section 6662.  Section 6662(a)             
          imposes a penalty in an amount equal to 20 percent of the portion           
          of the underpayment of tax attributable to one or more of the               
          items set forth in section 6662(b).  Respondent asserts that the            
          underpayments in issue are due to petitioner's negligence or                
          disregard of rules or regulations.  Sec. 6662(b)(1).                        
               Negligence has been defined as the failure to do what a                
          reasonable and ordinarily prudent person would do under the                 
          circumstances.  Neely v. Commissioner, 85 T.C. 934, 947 (1985).             
          Respondent's determinations are presumed correct, and petitioner            
          bears the burden of proving otherwise.  Rule 142(a); Luman v.               
          Commissioner, 79 T.C. 846, 860-861 (1982).                                  
               Petitioner was unable to provide substantiation for her                
          beginning and ending inventory values for her wholesale activity.           
          Further, petitioner was unable to provide substantiation for the            





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