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cause exception set forth in section 6664(c). Section
6664(c)(1) provides as follows:
(1) In General.--No penalty shall be imposed
under this part with respect to any portion of
an 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.
Petitioners have not shown that there was reasonable cause
for the underpayment in this case or that they acted in
good faith. In this regard, we point to the earlier
discussion in this opinion in which we did not accept
petitioners' testimony that they did not know of or
approve Beaufort Leaf's participation in the scheme.
Respondent also determined that Mr. Gaskins is liable
for an addition to tax under section 6651(a)(1) for failing
to timely file his 1991 tax return on the ground that the
return was filed after October 15, 1992, the due date of
the return. Respondent's determination is based upon the
postmark on the envelope in which Mr. Gaskins' return was
mailed to the Internal Revenue Service. Petitioners did
not address this issue at trial or mention it in their
posttrial briefs. Accordingly, we hereby sustain
respondent's determination and find Mr. Gaskins liable
for the addition to tax under section 6651(a)(1).
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