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the failure was due to reasonable cause and not willful neglect.
“Reasonable cause” requires the taxpayer to demonstrate that he
exercised ordinary business care and prudence. United States v.
Boyle, 469 U.S. 241, 246 (1985); sec. 301.6651-1(c)(1), Proced. &
Admin. Regs. Willful neglect is defined as a “conscious,
intentional failure or reckless indifference.” United States v.
Boyle, supra at 245. Respondent has met the burden of production
under section 7491(c) with respect to petitioners’ liability for
the additions to tax for failure to timely file their 1993 and
1994 tax returns because respondent has shown that petitioners
filed these returns on April 17, 1996. Thus, petitioners bear
the burden of proving that the failure is due to reasonable cause
and not due to willful neglect. Rule 142(a); United States v.
Boyle, supra at 245; Crocker v. Commissioner, 92 T.C. 899, 912
(1989).
Petitioners testified that their former accountant advised
them that the amount of the bad debt deduction could be used as a
deduction with respect to future taxes. Because petitioners
concluded no taxes would be due, they decided filing the tax
returns for the taxable years at issue was not necessary.
We have often found that a taxpayer’s mistaken belief that
he did not owe any tax is not reasonable cause for failure to
timely file a return. Linseman v. Commissioner, 82 T.C. 514, 523
(1984); Bradley v. Commissioner, T.C. Memo. 1998-170. We find
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