Carrie A. Lesnik - Page 8




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          one of which is negligence or disregard of rules or regulations.            
          See sec. 6662(b)(1).  “Negligence” includes any failure to make a           
          reasonable attempt to comply with the provisions of the Internal            
          Revenue Code and also includes any failure to keep adequate books           
          and records or to substantiate items properly.  Sec. 6662(c);               
          sec. 1.6662-3(b)(1), Income Tax Regs.  Section 6664(c)(1)                   
          provides that the penalty under section 6662(a) shall not apply             
          to any portion of an underpayment if it is shown that there was             
          reasonable cause for the taxpayer’s position and that the                   
          taxpayer acted in good faith with respect to that portion.  The             
          determination of whether a taxpayer acted with reasonable cause             
          and in good faith is made on a case-by-case basis, taking into              
          account all the pertinent facts and circumstances.  See sec.                
          1.6664-4(b)(1), Income Tax Regs.  The most important factor is              
          the extent of the taxpayer’s effort to assess his proper tax                
          liability for the year.  See id.  Reasonable cause and good faith           
          may be indicated by an honest and reasonable misunderstanding of            
          fact or law.  See id.                                                       
               Petitioner asserts that she includes the amount which she              
          believes to be alimony, $150 per month, in her taxable income               
          each year.  The record does not support this assertion.  In 1997,           
          petitioner reported $3,022.73 in excess of her wage income.  This           
          amount was far in excess of a $150 monthly payment, which would             
          equal $1,800.  Petitioner did not explain the discrepancy.  We              






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