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per curiam 540 F.2d 821 (5th Cir. 1976).
As relevant herein, section 6662(a) imposes an accuracy-
related penalty equal to 20-percent of an underpayment that is
due to a substantial understatement of income tax. See sec.
6662(a) and (b)(2). An individual substantially understates his
or her income tax when the reported tax is understated by the
greater of 10-percent of the tax required to be shown on the
return or $5,000. Sec. 6662(d)(1)(A). Tax is not understated to
the extent that the treatment of the item is (1) based on
substantial authority, or (2) relevant facts are adequately
disclosed in the return or in a statement attached to the return
and there is a reasonable basis for the tax treatment of such
item by the taxpayer. Sec. 6662(d)(2)(B).
Moreover, the accuracy-related penalty does not apply with
respect to any portion of an underpayment if it is shown that
there was reasonable cause for such portion and that the taxpayer
acted in good faith with respect to such portion. Sec.
6664(c)(1). The determination of whether a taxpayer acted with
reasonable cause and in good faith is made on a case-by-case
basis, taking into account all the pertinent facts and
circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs. The most
important factor is the extent of the taxpayer’s effort to assess
the taxpayer’s proper tax liability for such year. Id.
Petitioner reported zero tax on his 1998 return. The amount
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