- 8 - her to exclude $100 from self-employment income as income from services as a notary public. The remaining $9,140 is subject to self-employment tax under section 1401. Petitioner is entitled to the corresponding deduction under section 164(f) on all self- employment tax imposed by section 1401. Section 6651(a)(1) imposes an addition to tax for failure to file a return on time. The addition equals 5 percent for each month that the return is late, not to exceed 25 percent. Additions to tax under section 6651(a)(1) are imposed unless the taxpayer establishes that the failure was due to reasonable cause and not willful neglect. Section 7491(c) does not change the taxpayer’s burden of proof in this respect. Higbee v. Commissioner, 116 T.C. 438 (2001). “Reasonable cause” requires a taxpayer to demonstrate that she exercised ordinary business care and prudence. United States v. Boyle, 469 U.S. 241, 246 (1985). Willful neglect is defined as a “conscious, intentional failure or reckless indifference.” Id. at 245. Petitioner’s return was untimely filed on July 21, 1997, even though it bore a signature date of April 13, 1997. Petitioner did not show reasonable cause why the return was not timely filed. A comparison of the signature date and the filing date leads to the conclusion that the late filing was due to willful neglect. We conclude that petitioner is liable for anPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011