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from qualified retirement plans. Using funds received from a
distribution in petitioner's business is not encompassed within
these exceptions. See sec. 72(t)(2)(A), (B), and (C).
Respondent is sustained on this issue.
4. Section 6651(a) Addition to Tax
Respondent determined that petitioner is liable for the
addition to tax under section 6651(a) for failure to file a
timely return for the 1994 taxable year.
Section 6651(a)(1) provides for an addition to tax for
failure to file a timely return. The addition to tax is equal to
5 percent of the amount required to be shown as tax on the
return, with an additional 5 percent for each additional month or
fraction thereof that the return is filed late, not exceeding 25
percent in the aggregate.
A taxpayer may avoid the addition to tax by establishing
that the failure to file a timely return was due to reasonable
cause and not willful neglect. Rule 142(a); United States v.
Boyle, 469 U.S. 241, 245-246 (1985). A failure to file is due to
"reasonable cause" if the taxpayer exercised ordinary business
care and prudence and was, nevertheless, unable to file his
return within the date prescribed by law. See Crocker v.
Commissioner, 92 T.C. 899, 913 (1989); Estate of Vriniotis v.
Commissioner, 79 T.C. 298, 310 (1982); sec. 301.6651-1(c)(1),
Proced. & Admin. Regs. Willful neglect is viewed as a conscious,
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