Franklin W. Briggs - Page 50




                                       - 50 -                                         
              Petitioners’ understatements of income tax each exceed the              
         greater of 10 percent of the tax required to be shown on the                 
         returns or $5,000.  Consequently, there are substantial                      
         understatements within the meaning of section 6661.                          
              On brief, petitioners contend only that they reasonably and             
         in good faith relied on the advice of their accountants in                   
         preparing their tax returns.  Ostensibly, petitioners seek                   
         thereby to invoke the Commissioner’s authority to waive the                  
         addition to tax pursuant to section 6661(c).  The Commissioner’s             
         denial of waiver under section 6661(c) is reviewable for abuse of            
         discretion.  See Martin Ice Cream Co. v. Commissioner, 110 T.C.              
         189, 234 (1998).  The record does not show that petitioners ever             
         requested respondent to waive the penalty.  Accordingly, absent              
         such a request by petitioners, we cannot find that respondent                
         abused his discretion.  See id. at 234-235, and cases cited                  
         therein.35                                                                   
              Even if we were to assume arguendo that petitioners did                 
         request waivers pursuant to section 6661(c), petitioners have not            
         established that respondent would have abused his discretion in              
         refusing the requests.  Petitioners have not proved that they                
         provided their accountants with complete information for                     
         preparing their returns.  The evidence shows that the books and              

               35 Under sec. 6664(c) of current law, effective for returns            
          with a due date after Dec. 31, 1989, no penalty may be imposed              
          for understatements if the taxpayer shows that it had reasonable            
          cause and acted in good faith.  See Omnibus Budget Reconciliation           
          Act of 1989, Pub. L. 101-239, sec. 7721(a), 103 Stat. 2398.                 




Page:  Previous  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  Next

Last modified: May 25, 2011