Michael G. Bunney - Page 14

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          penalty is also inapplicable where a taxpayer has a “reasonable             
          basis” for the return position taken.  See sec. 1.6662-3(b),                
          Income Tax Regs.  A return position that is “arguable, but fairly           
          unlikely to prevail in court” satisfies the reasonable basis                
          standard.  Sec. 1.6662-4(d)(2), Income Tax Regs.  The negligence            
          accuracy-related penalty is inappropriate where an issue to be              
          resolved by the Court is one of first impression involving                  
          unclear statutory language.  See Everson v. United States, 108              
          F.3d 234 (9th Cir. 1997); Lemishow v. Commissioner, 110 T.C. 110            
               With respect to petitioner’s conceded items, petitioner                
          claimed deductions to which he was not entitled, duplicated                 
          deductions, and omitted taxable gain from the sale of property.             
          Petitioner also failed to report income from more than half of              
          his IRA distributions and failed to pay the 10-percent premature            
          distribution penalty.  Petitioner contends that he is not liable            
          for an accuracy-related penalty with respect to these items                 
          because Form 1040 is a “complicated return”, and he utilized a              
          tax software program to prepare his return.                                 
               On this stipulated record, we conclude petitioner is liable            
          for the negligence accuracy-related penalty with respect to the             
          conceded items.  There is no evidence that reasonable cause                 
          existed for these errors or that petitioner was not negligent.              
          Tax preparation software is only as good as the information one             

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