- 21 -
the horse activity. Even a hobby, however, can require
considerable work. With regard to a profit objective, this
factor is neutral.
In summary, the circumstances of this case, when considered
within the framework of the nine factors above, indicate that
petitioner did not possess the requisite intent to profit from
her horse activity. Petitioner therefore is subject to the
restrictions set forth in section 183 and improperly deducted
losses from her horse activity.
III. Section 6651(a)(1) Addition to Tax
Respondent determined that petitioner is liable for an
addition to tax under section 6651(a)(1) for failure timely to
file her 1993 Federal income tax return. Section 6651(a)(1)
provides for an addition to tax of 5 percent of the tax required
to be shown on the return for each month or fraction thereof for
which there is a failure to file, the aggregate not to exceed 25
percent. In order to avoid the imposition of the addition to
tax, the taxpayer bears the burden of proving that the failure
did not result from willful neglect and that the failure was due
to reasonable cause. Sec. 6651(a)(1); United States v. Boyle,
469 U.S. 241, 245 (1985).
Respondent extended the due date for petitioner’s 1993
Federal income tax return from April 15 to August 15, 1994.
Petitioner filed her 1993 income tax return on February 16, 1996.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011