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4. Addition for Failure To Timely File Return
Section 6651(a)(1) provides that a taxpayer who fails to
timely file a return “shall” pay an addition to tax of 5 percent
per month of the amount required to be shown on the return, not
to exceed 25 percent. The provision is mandatory, “unless it is
shown that such failure is due to reasonable cause and not due to
willful neglect.” Id. Respondent did not include a failure to
file addition under section 6651(a)(1) in the notice of
deficiency, presumably because respondent’s personnel at the
Internal Revenue Service Center were confused by the unsigned
Form 1040 filed by petitioner showing no tax due. Had respondent
included the section 6651(a)(1) addition in the notice of
deficiency, petitioner would have been liable for an addition of
25 percent of the amount that should have been shown on the
return.
Section 6214(a) gives us jurisdiction to redetermine the
correct amount of the deficiency even if the amount so
redetermined is greater than the amount set forth in the notice
of deficiency “if claim therefor is asserted by the Secretary at
or before the hearing or a rehearing.” Even after realizing that
petitioner had failed to file a valid income tax return,
respondent inexplicably did not assert a claim for the section
6651(a)(1) addition. Because respondent asserted no claim for
the section 6651(a)(1) addition at or before the hearing, we
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Last modified: May 25, 2011