Karan M. Hintze - Page 22

                                       - 22 -                                         
          246 (1985).  Petitioner’s belief that she did not owe any tax               
          does not satisfy the reasonable cause standard under section                
          6651(a)(1).  See Klyce v. Commissioner, T.C. Memo. 1999-198;                
          Presnick v. Commissioner, T.C. Memo. 1997-398; Krieger v.                   
          Commissioner, T.C. Memo. 1993-347.  Petitioner advanced no other            
          reasons why her returns for 1992 and 1994 were not timely filed.            
          Respondent is therefore sustained on the additions to tax under             
          section 6651(a)(1).                                                         
               2.   Negligence Penalty                                                
               Section 6662(a) imposes an accuracy-related penalty in the             
          amount of 20 percent of the portion of the underpayment of tax              
          attributable to negligence or disregard of rules or regulations.            
          See sec. 6662(b)(1).  Negligence is any failure to make a                   
          reasonable attempt to comply with the provisions of the internal            
          revenue laws.  See sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax            
          Regs.  Moreover, negligence has been described as the failure to            
          exercise due care or the failure to do what a reasonable and                
          prudent person would do under the circumstances.  See Neely v.              
          Commissioner, 85 T.C. 934, 947 (1985).  Disregard includes any              
          careless, reckless, or intentional disregard of rules or                    
          regulations.  See sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax             
          Regs.  Once the Commissioner has determined an accuracy-related             
          penalty pursuant to section 6662(b)(1), the taxpayer bears the              
          burden of proof as to such issue.  See Bixby v. Commissioner, 58            
          T.C. 757, 791 (1972).                                                       

Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011