Andrea Cipriano - Page 14




                                       - 14 -                                         
          to disregard of rules and regulations.  For purposes of section             
          6662(a), negligence consists of a failure to make a reasonable              
          attempt to comply with the Code.  See sec. 6662(c).                         
               Accuracy-related penalties under section 6662(a) do not                
          apply to any part of an underpayment if the taxpayer shows                  
          reasonable cause and if the taxpayer acted in good faith.  See              
          sec. 6664(c).  Whether a taxpayer acted with reasonable cause and           
          in good faith is ascertained on a case-by-case basis, taking into           
          account all of the pertinent facts and circumstances.  See sec.             
          1.6664-4(b)(1), Income Tax Regs.                                            
               Circumstances that may establish reasonable cause and good             
          faith include an honest misunderstanding of fact or law that is             
          reasonable in light of the experience, knowledge, and education             
          of the taxpayer.  See id.                                                   
               With regard to the penalties under section 6662(a) for 1994            
          and 1996, the parties make no argument regarding the burden of              
          proof or the burden of production.  See sec. 7491(c).                       
               Because of petitioner’s education and professional                     
          experience, and because the agreement adequately identified the             
          payments in question as interest, petitioner knew or should have            
          known that the payments constituted interest income and were                
          includable in her Federal income tax returns.                               
               We conclude that petitioner is liable for the accuracy-                
          related penalties.                                                          






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011