Clair and Judith Worthington - Page 5




                                        - 5 -                                         
          indicates that they tried to reconstruct the information                    
          contained in these worksheets.  Accordingly, we find that                   
          petitioners are not entitled to the bad debt deductions claimed             
          on their 1994 and 1995 Federal income tax returns.                          
               Petitioners also have not furnished any documentation that             
          substantiates their claim that they included the interest income            
          from First Union National Bank of Florida on their 1994 Federal             
          income tax return.  Accordingly, we find for respondent on this             
          issue.                                                                      
               Section 6662(a) imposes a penalty of 20 percent of the                 
          portion of the underpayment which is attributable to negligence             
          or disregard of rules or regulations.  See sec. 6662(b)(1).                 
          Negligence is the lack of due care or failure to do                         
          what a reasonable and ordinarily prudent person would                       
          do under the circumstances.  See Neely v.                                   
          Commissioner, 85 T.C. 934, 947 (1985).  The term                            
          "disregard" includes any careless, reckless, or                             
          intentional disregard.  Sec. 6662(c).  In general,                          
          taxpayers are required to "keep such permanent books                        
          of account or records, including inventories, as are                        
          sufficient to establish the amount of gross income,                         
          deductions, credits, or other matters required to be                        
          shown by such person in any return of such tax or                           
          information."  Sec. 1.6001-1(a), Income Tax Regs.                           





Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011