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unsuccessful experience with Amway. Additionally, respondent has
shown that petitioners failed to substantiate their claimed
charitable contribution deductions. These circumstances show
that respondent has met his burden of production for his
determination of the accuracy-related penalty based on
negligence. Also, with regard to that determination, petitioners
have failed to meet their burden of proof that they acted with
reasonable cause and in good faith.
On this record, we find that petitioners have failed to
demonstrate that they were not negligent and also have failed to
show that they did not disregard applicable rules or regulations.
They have not shown that there was reasonable cause for their
underpayment or that they acted in good faith.
Accordingly, we sustain respondent’s imposition of the
accuracy-related penalty under section 6662(a) for 1997.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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