Rodney M. Fujiyama and Vicki Ann Fujiyama - Page 9




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          section 6653(a)(2) in connection with a research and development            
          deduction disallowed at the partnership level.                              
                                     Discussion                                       
               Section 6653(a)(2) imposes an addition to tax equal to 50              
          percent of the interest payable with respect to the portion of              
          underpayment attributable to negligence or intentional disregard            
          of rules and regulations for the period beginning on the last day           
          prescribed by law for payment of such underpayment (determined              
          without regard to any extension) and ending on the date of the              
          assessment of the tax.  For purposes of section 6653, negligence            
          is defined as “lack of due care or failure to do what a                     
          reasonable and ordinarily prudent person would do under the                 
          circumstances.”  Neely v. Commissioner, 85 T.C. 934, 947 (1985)             
          (quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th Cir.              
          1967), affg. in part and remanding in part 43 T.C. 168 (1964));             
          see Allen v. Commissioner, 925 F.2d 348, 353 (9th Cir. 1991),               
          affg. 92 T.C. 1 (1989); Zmuda v. Commissioner, 731 F.2d 1417,               
          1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982).  Negligence is              
          determined by testing a taxpayer’s conduct against that of a                
          reasonable, prudent person.  Zmuda v. Commissioner, supra.                  
               The Commissioner’s decision to impose the negligence penalty           
          is presumptively correct.  Collins v. Commissioner, 857 F.2d                
          1383, 1386 (9th Cir. 1988), affg. Dister v. Commissioner, T.C.              
          Memo. 1987-217; Hansen v. Commissioner, 820 F.2d 1464, 1469 (9th            






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