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Taxpayers are required to keep such books or records "at all
times available for inspection by authorized internal revenue
officers or employees, and [these records] shall be retained so
long as the contents thereof may become material in the
administration of any internal revenue law." Sec. 1.6001-1(e),
Income Tax Regs. When they destroyed the worksheets used in the
preparation of their income tax returns, and failed otherwise to
maintain adequate books and records, petitioners did not exercise
due care and failed to do what a reasonable and ordinarily
prudent person would do. Accordingly, we hold that petitioners
were negligent with respect to the entire underpayment for each
of the years 1994 and 1995 and, therefore, are liable for the
accuracy-related penalties under section 6662(a).
To reflect the foregoing concessions,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011