- 22 -
6662(c). The amount of the penalty is 20 percent of the
portion of the underpayment to which section 6662 applies.
See sec. 6662(a).
An exception to imposition of the negligence penalty
is provided by section 6664(c). Under that exception, "No
penalty shall be imposed * * * with respect to any portion
of an underpayment if it is shown there was a reasonable
cause" for that portion of the underpayment and "the
taxpayer acted in good faith". Petitioner bears the burden
of proving that he is not liable for the penalty under
section 6662(a). See Vaira v. Commissioner, 444 F.2d 770
(3d Cir. 1971), revg. on another issue 52 T.C. 986 (1969);
Bixby v. Commissioner, 58 T.C. 757, 791 (1972).
Petitioner argues as follows:
Accurate records of gambling losses and winnings
are difficult to maintain. The very nature of
the business makes this task daunting, if not
impossible. The very fact that petitioner
reported his gambling winnings and losses in his
1991 income tax return, produced records of this
fact seven years later, attests to the degree of
effort taken by the petitioner to accurately
report his gambling winnings and losses. Before
the accuracy-related penalty is imposed, I.R.C.
�6662(b)(1) requires taxpayer negligence or
disregard for the rules. In the instant case,
the respondent has shown neither exists.
Respondent argues that petitioner has not met his burden
of proof under section 6662(a). According to respondent,
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011