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in his answer, respondent must prove petitioners are liable for
the addition to tax under section 6662(a). See Rule 142(a). At
trial, Carris Kocher testified she was aware they were required
to include SSN’s for their children in order to obtain dependency
exemptions when she and her husband filed their 1997 Federal
income tax return. In claiming exemptions for their children but
failing to provide SSN’s, petitioners intentionally disregarded
rules and regulations.
Moreover, they substantially understated their income tax.
Petitioners reported tax due of $5,141 on their return. A
deficiency of $6,520 resulted from the denial of dependency
exemptions. There is no substantial authority for petitioners’
omission of their children’s SSN’s on their return, nor did
petitioners make adequate disclosure of the relevant facts
regarding their omission. See sec. 1.6662-4(f)(2), Income Tax
Regs.; Rev. Proc. 97-56, 1997-2 C.B. 582. The deficiency thus
exceeds the greater of 10 percent of the tax required to be shown
on their return for the taxable year or $5,000.
Petitioners do not qualify for the reasonable cause
exception of section 6664(c). They had no reasonable cause to
to claim exemptions for their children because they had no
intention of including SSN’s for the children and were aware of
the SSN requirement. Petitioners are not excused from satisfying
the specific statutory requirements for any deduction they claim.
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