Victor and Lorain Cisneros - Page 9




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               everything was fine.  He told us that everybody should be              
               getting money back from the IRS.  If you didn't, whoever               
               would prepare them didn't prepare them right, your returns.            
               He convinced us that everything was fine.                              
                    He told us that there were limits that you could go up            
               to, not to get in trouble with, not to do anything wrong               
               with.  He made sure that we were okay, that we asked him,              
               you know, how is this going to come out later on?  Are we              
               going to get in trouble?  What's going to happen?                      
                    This is, you know, we weren't sure either.  We didn't             
               understand it.  We were confused, too.  And he made sure               
               that everything was right.  He made sure of it.                        

               Section 6662(a) provides for an accuracy-related penalty               
          equal to 20 percent of any portion of an underpayment of tax                
          required to be shown on the return that is attributable to the              
          taxpayer's negligence or disregard of rules or regulations.  Sec.           
          6662(a) and (b)(1).  Negligence consists of any failure to make a           
          reasonable attempt to comply with the provisions of the Internal            
          Revenue Code and disregard consists of any careless, reckless, or           
          intentional disregard.  Sec. 6662(c).  The courts have refined              
          the Code definition of negligence as a lack of due care or                  
          failure to do what a reasonable and prudent person would do under           
          similar circumstances.  Allen v. Commissioner, 925 F.2d 348, 353            
          (9th Cir. 1991), affg. 92 T.C. 1 (1989).  Section 1.6662-3(b)(1),           
          Income Tax Regs., provides that "Negligence is strongly indicated           
          where * * * a taxpayer fails to make a reasonable attempt to                
          ascertain the correctness of a deduction * * * on a return which            







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