Bobby E. Welch - Page 19

                                       - 19 -                                         
          that provides any basis from which we could determine the amount            
          of the 1984 NOL that was absorbed in the years before 1986, the             
          earliest year before the Court.  Accordingly, petitioner has not            
          shown that he is entitled to deductions under section 172 for any           
          of the years before the Court.                                              
          Additions to Tax and Penalties                                              
               Respondent determined additions to tax for failure to timely           
          file returns under section 6651(a) for all the years at issue;              
          additions to tax for negligence under section 6653(a)(1)(A) and             
          (B) for 1986 and 1987; an addition to tax for negligence under              
          section 6653(a)(1) for 1988; additions to tax for substantial               
          understatements under section 6661(a) for 1986, 1987, and 1988;             
          and accuracy-related penalties for negligence under section                 
          6662(a) for 1989 and 1990.                                                  
               Section 6651(a) imposes an addition to tax for failure to              
          timely file returns "unless it is shown that such failure is due            
          to reasonable cause and not due to willful neglect".  Sec.                  
          6651(a)(1).  Reasonable cause "calls on the taxpayer to                     
          demonstrate that he exercised 'ordinary business care and                   
          prudence' but nevertheless was 'unable to file the return within            
          the prescribed time.'"  United States v. Boyle, 469 U.S. 241, 246           
          (1985) (quoting sec. 301.6651-1(c)(1), Proced. & Admin. Regs).              
          Willful neglect means "a conscious, intentional failure or                  
          reckless indifference."  United States v. Boyle, supra at 245.              
          It is undisputed that the returns for the taxable years 1986                




Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011