Conrad George Olsen - Page 14




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          of rules or regulations.  See sec. 6662(b)(1).  Negligence is the           
          “‘lack of due care or failure to do what a reasonable and                   
          ordinarily prudent person would do under the circumstances.’”               
          Neely v. Commissioner, 85 T.C. 934, 947 (1985)(quoting Marcello             
          v. Commissioner, 380 F.2d 499, 506 (5th Cir. 1967), affg. 43 T.C.           
          168 (1964) and T.C. Memo. 1964-299).  Negligence also includes              
          any failure by the taxpayer to keep adequate books and records or           
          to substantiate items properly.  See sec. 1.6662-3(b)(1), Income            
          Tax Regs.  The term “disregard” includes any careless, reckless,            
          or intentional disregard.  Sec. 6662(c).  No penalty shall be               
          imposed if it is shown that there was reasonable cause for the              
          underpayment and the taxpayer acted in good faith with respect to           
          the underpayment.  See sec. 6664(c).  The determination of                  
          whether a taxpayer acted with reasonable cause and good faith               
          within the meaning of section 6662(c) 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.                   
               Petitioner failed to show that he had a reasonable basis for           
          his belief that the gain from the Tryon Road property was not               
          taxable.  He failed to make reasonable inquiries as to whether              
          the income reported on a Form 1099-S was taxable.  See Rosenbaum            
          v. Commissioner, T.C. Memo. 1992-287, affd. 998 F.2d 1016 (7th              
          Cir. 1993).                                                                 








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