Franklin D. and Sandra M. Terrell - Page 7

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          reasonable and ordinarily prudent person would do under the                 
          circumstances."  Neely v. Commissioner, 85 T.C. 934, 947 (1985).            
          The accuracy-related penalty under section 6662(a) does not apply           
          to any portion of an underpayment if it is shown that there was             
          reasonable cause for such portion and that the taxpayer acted in            
          good faith.  See sec. 6664(c)(1).                                           
               In this case, petitioners were negligent.  For each of the             
          taxable years in issue, petitioners failed to report interest               
          income, Schedule C income, and rental income.  In addition,                 
          petitioners failed to maintain adequate records to substantiate             
          Schedule C expenses and rental deductions claimed on their                  
          return.  Thus, the record adequately demonstrates that                      
          petitioners were "careless" and did not make a "reasonable"                 
          attempt to comply with the provisions of the Internal Revenue               
               By Mr. Terrell's testimony, petitioners contend that they              
          are not liable for the accuracy-related penalty under section               
          6662(a) for any of the years in issue because they relied on                
          their tax return preparer, Mr. Still, to prepare their returns              
          accurately.  In the circumstances petitioners' responsibility of            
          filing accurate tax returns "cannot be avoided by placing                   
          responsibility on an agent."  Pritchett v. Commissioner, 63 T.C.            
          149, 174 (1974).  In the case of alleged reliance upon an                   
          accountant who prepared the taxpayer's return, a taxpayer may               

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