- 8 -
not satisfied the Court that he had a good faith primary
objective of making a profit from his activity during 1996. See
Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd. without
opinion 702 F.2d 1205 (D.C. Cir. 1983). The Court concludes that
petitioner's activity was not engaged in primarily for profit.
Having so concluded, the Court finds it unnecessary to consider
respondent's alternative determination that petitioner's expenses
related to the activity were not substantiated. Respondent,
therefore, is sustained on this issue.
Section 6662(a) provides that, if that section is applicable
to any portion of an underpayment in taxes, there shall be added
to the tax an amount equal to 20 percent of the portion of the
underpayment to which section 6662 applies. Under section
6664(c), no penalty shall be imposed under section 6662(a) with
respect to any portion of an underpayment if it is shown that
there was a reasonable cause and that the taxpayer acted in good
faith with respect to such portion of the underpayment.
Section 6662(b)(1) provides that section 6662 shall apply to
any underpayment attributable to negligence or disregard of rules
or regulations. Negligence is defined as lack of due care or
failure to do what a reasonable and ordinarily prudent person
would do under like circumstances. See Neely v. Commissioner, 85
T.C. 934 (1985). The term "negligence" includes any failure to
make a reasonable attempt to comply with the provisions of the
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011