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was not entitled to head of household filing status was
reasonable.
Accuracy-Related Penalty Under Section 6662
Section 6662 imposes a penalty equal to 20 percent of the
portion of the underpayment of tax attributable to negligence or
disregard of rules or regulations. See sec. 6662(a) and (b)(1).
Negligence is defined as any failure to make a reasonable attempt
to comply with the provisions of the Internal Revenue Code, and
the term "disregard" includes any careless, reckless, or
intentional disregard. See sec. 6662(c).
Petitioner has not disputed the legal standard applied by
respondent here but disputes only whether respondent had a
reasonable factual basis to believe that the legal standard
applied to him. This case is primarily one of substantiation.
When respondent issued the statutory notice of deficiency and
filed the answer in this case, petitioner had not substantiated
deductions for charitable contributions, home mortgage interest,
and dependency exemptions. Indeed, although respondent has
settled the issues in this case, petitioner has yet provided only
indirect or inferential evidence for most of the issues involved
here. We conclude that the position of respondent had a
reasonable basis in fact based on the information produced during
the examination in this case before trial.
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