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and that they acted in good faith with respect to the
underpayment. See sec. 6664(c).
Petitioners failed to maintain adequate records.
Petitioners presented no evidence to show that they acted with
reasonable cause or good faith. Petitioners did not meet their
burden of proving that they were not negligent and that there was
no substantial understatement of income tax. Respondent's
deficiency determination of $11,450, which we uphold, exceeds 10
percent of the amount required to be shown on the return and is
more than $5,000. We, therefore, hold that petitioners are
liable for an accuracy-related penalty of 20 percent.
Decision will be entered for
respondent.
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