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issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
After concessions, the only remaining issue is whether
petitioner is liable for accuracy-related penalties relating to
1993 and 1994.
FINDINGS OF FACT
Petitioner, Reed-Merrill, Inc., was a Nebraska corporation
at the time the petition was filed. Petitioner, through a
subsidiary corporation, operated a Ford dealership in Ogallala,
Nebraska. In 1993 and 1994, petitioner employed individuals and
utilized computer systems to keep records. Petitioner provided
some (i.e., Ford Motor Company Dealer Financial Statements), but
not all, of its records to an accountant hired to prepare
consolidated corporate income tax returns for the years in issue.
Respondent determined that the petitioner understated its income
and is liable for accuracy-related penalties relating to 1993 and
1994.
OPINION
Section 6662(a) imposes a penalty on an underpayment of tax
required to be shown on a return if such underpayment is
attributable to negligence. Section 6664(c)(1) provides that no
penalty shall be imposed if it is shown that there was reasonable
cause for the underpayment and that the taxpayer acted in good
faith. The determination of whether a taxpayer acted with
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Last modified: May 25, 2011