- 6 -
$22,009 was deducted on the return, and depreciation of $1,645.50
was allowed as a deduction based on the audit. Wages of $236,903
are shown on the return; payroll of $231,793.87 is listed on the
reconstruction. Rent of $160,306 was reported; rent of
$141,297.03 was included in the adjusted expense amounts. Only
advertising expenses of $3,600 correspond precisely in the two
computations.
OPINION
We must decide whether petitioner is liable for either the
delinquency addition to tax or the accuracy-related penalty in
connection with the filing and content of his 1995 Federal income
tax return, or for both.
Petitioner contends that the stipulations entered by the
parties constitute a full settlement of all issues in exchange
for the payment of an additional tax of $17,823 for 1995. To
determine supplemental sums under sections 6651 and 6662 is
therefore, in petitioner’s view, a violation of the settlement
agreement. Petitioner also asserts that his reliance on a
certified public accountant to prepare and file his return
establishes reasonable cause excusing him from responsibility for
any untimeliness or inaccuracies.
Conversely, respondent argues that petitioner’s alleged
reliance on his tax preparer fails to satisfy the standard of
reasonable cause necessary to relieve petitioner from either the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011