- 48 -
Commissioner, 89 T.C. 849, 887 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991).
Section 6664(c)(1) provides that the accuracy-related
penalty shall not be imposed with respect to any portion of an
underpayment if it is shown that a taxpayer acted in good faith
and that there was reasonable cause for the underpayment. The
determination of whether a taxpayer acted with reasonable cause
and in good faith is made on a case-by-case basis, taking into
account all pertinent facts and circumstances. See sec. 1.6664-
4(b)(1), Income Tax Regs. Petitioners bear the burden of proving
facts showing good faith and reasonable cause. See Rule 142(a).
In the notice of deficiency, respondent determined that
petitioners had omitted commission income of $28,000 from their
1993 return. Petitioners conceded this adjustment prior to trial
but introduced no evidence at trial to explain the omission.13
As to the underpayment attributable to this adjustment,
therefore, petitioners have failed to prove that they acted with
reasonable cause and in good faith as required by section 6664.
The accuracy-related penalty as it relates to this adjustment is
sustained.
13Although petitioners attempted to provide in their brief
an explanation for their failure to report the commission income,
they failed to introduce evidence to that effect at trial.
Petitioners’ failure to adduce evidence at trial on this issue
cannot be remedied on brief. See Rule 143(b); Evans v.
Commissioner, 48 T.C. 704, 709 (1967), affd. per curiam 413 F.2d
1047 (9th Cir. 1969).
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