- 24 -
avoid late-filing additions to tax merely by showing that he
relied on an agent to file his tax returns.
Petitioner also failed to introduce any evidence to show
that the delay was caused by its accountant’s neglect, as
opposed to petitioner’s own neglect. We therefore hold that
petitioner is liable for the late-filing additions to tax under
section 6651(a)(1).
Issue 3. Accuracy-Related Penalties
Section 6662(a) imposes a 20-percent penalty on the
underpayment of tax attributable to, among other things, the
taxpayer’s “negligence or disregard of rules or regulations.”7
Sec. 6662(b)(1). Negligence is defined to include the “failure
to make a reasonable attempt to comply” with the tax laws. Sec.
6662(c).
Section 6664(c)(1) contains a defense to the accuracy-
related penalty provisions. It provides:
No penalty shall be imposed under this part with
respect to any portion of an underpayment if it is
shown that there was a reasonable cause for such
portion and that the taxpayer acted in good faith with
7Respondent argued on brief that petitioner should also be
liable for the accuracy-related penalty because of its
“substantial understatement of income tax.” See sec. 6662(b)(2).
However, respondent did not seek the accuracy-related penalties
on the grounds of “substantial understatement” in the notice of
deficiency. We need not consider whether this alternative ground
for supporting the penalty is properly before us, and if so who
would bear the burden of proof, because petitioner has failed to
meet its burden of proof on the negligence ground stated in the
notice of deficiency.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011