Robert L. Beck - Page 25

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          Dr. Beck’s Liability for Accuracy-Related Penalties                         
               Respondent contends that for each year in issue Dr. Beck is            
          liable for the section 6662(a) accuracy-related penalty.  Section           
          6662(a) imposes a 20-percent penalty on any portion of an                   
          underpayment that is attributable to, among other things,                   
          negligence or disregard of the rules or regulations.  Sec.                  
          6662(b)(1).  Negligence is the lack of due care or failure to do            
          what a reasonable and ordinarily prudent person would do under              
          the same circumstances.  Neely v. Commissioner, 85 T.C. 934                 
          (1985).  No penalty shall be imposed under section 6662(a) with             
          respect to any portion of an underpayment if it is shown that               
          there was reasonable cause and that the taxpayer acted in good              
          faith.  Sec. 6664(c).                                                       
               Dr. Beck failed to produce evidence to substantiate the                
          deductions he claimed on his Schedules C and F.  His failure to             
          maintain and to produce records of his business activities shows            
          not only negligence but intentional disregard of rules and                  
          regulations requiring a taxpayer to keep permanent records                  
          sufficient to establish his gross income and deductions.  See               
          Crocker v. Commissioner, 92 T.C. 899, 917 (1989); Schroeder v.              
          Commissioner, 40 T.C. 30, 34 (1963).                                        
               Dr. Beck has come forward with no evidence to establish that           
          he acted in good faith.  As previously discussed, Dr. Beck’s                
          claims that office cleaning people accidentally discarded all his           
          business records are not credible.  Dr. Beck is liable for the              

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Last modified: May 25, 2011