- 69 - II. Penalties The remaining issue we must decide is whether petitioners are liable for accuracy-related penalties pursuant to section 6662(a). Respondent determined that petitioners are liable for section 6662(a) accuracy-related penalties for 1991, 1992, and 1993. The penalties were determined with respect to the section 269 issue (i.e., the disallowed NOL deductions), as well as the adjustments conceded by petitioners in the petition. Because we held supra that section 269 does not operate to disallow petitioners' use of Tri-Power's NOL's, the only issue remaining to be decided is whether petitioners are liable for section 6662(a) accuracy-related penalties with respect to the adjustments conceded in the petition. Section 6662(a) imposes a penalty equal to 20 percent of the portion of the underpayment of tax attributable to one or more of the items set forth in subsection (b). Respondent contends that the section 6662(a) penalty for 1992 was due to negligence or disregard of rules or regulations and that the section 6662(a) penalties for 1991, 1992, and 1993 were based on substantial understatements of income tax. See sec. 6662(b)(1) and (2). The accuracy-related penalty does not apply with respect to any portion of the underpayment if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion. See sec. 6664(c)(1).Page: Previous 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Next
Last modified: May 25, 2011