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under section 6651(a)(1) for failure to file a return
unless such failure is due to a reasonable cause and not
willful neglect. See sec. 6651(a)(1). The amount of the
addition to tax is 5 percent of the tax required to be
shown on the return, if the return is filed within a month
of the due date, with an additional 5 percent for each
additional month or fraction thereof during which the
failure continues, not exceeding 25 percent in the
aggregate. See id. Petitioner bears the burden of proving
that he is not liable for the addition. See Rule 142(a).
Petitioner argues as follows:
* * * Of the $100,000.00 the petitioner
received from the FBI, ninety percent (90%), or
$90,000.00 was received after petitioner had
worked undercover for the FBI. It was agreed
that this payment of $100,000.00 would be used
to pay for the enormous cost of relocating the
petitioner and his family to Puerto Rico.
Although it is true the FBI did not have the
authority to determine the taxability of this
payment, it is certainly reasonable for
petitioner to rely on the FBI's position and
statements regarding this payment. Respondent
correctly states that is the burden of the
petitioner to establish this fact. However,
due to the highly sensitive nature of the
undercover operation (which is ongoing), it can
hardly be expected for the petitioner to produce
as witnesses the FBI agents responsible for
leading the petitioner to believe this payment
would not be considered taxable income. It is
the position of the petitioner that this
$100,000.00 payment is not fully taxable. If
plausible disagreement as to the taxability of
this income exists to this day, it can surely be
said the petitioner had a reasonable expectation
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