- 12 - disclosed on the taxpayer’s return or an attached statement, and there is a reasonable basis for the taxpayer’s treatment of the item. See sec. 6662(d)(2)(B). Section 6664(c)(1) provides that the penalty under section 6662(a) shall not apply to any portion of an underpayment if it is shown that there was reasonable cause for the taxpayer’s position and that the taxpayer acted in good faith with respect to that portion. 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 the pertinent facts and circumstances. See sec. 1.6664-4(b)(1), Income Tax Regs. The most important factor is the extent of the taxpayer’s effort to assess his proper tax liability for the year. See id. Petitioners dispute the assertion of the accuracy-related penalties, but have not presented any evidence or arguments specifically addressing this issue. We find that the record in its entirety supports respondent’s assertion of the penalties in this case, and we therefore uphold respondent’s determination in this regard, as modified by respondent’s concessions and our holding on the other issues in this case. Reviewed and adopted as the report of the Small Tax Case Division.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011