Wing Yiu Kwan - Page 14




                                       - 13 -                                         

          to his trade or business rather than primarily personal in                  
          nature.  Accordingly, on this record, the Court holds that                  
          petitioner is not entitled to the Schedule C deduction for                  
          travel, meals, and entertainment expenses.                                  
               The final issue is whether petitioner is liable for the                
          accuracy-related penalty under section 6662(a) for negligence or            
          disregard of rules or regulations.  Section 6662(a) provides                
          that, if it is applicable to any portion of an underpayment in              
          taxes, there shall be added to the tax an amount equal to 20                
          percent of the portion of the underpayment to which section 6662            
          applies.  Section 6662(b)(1) provides that section 6662 shall               
          apply to any underpayment attributable to negligence or disregard           
          of rules or regulations.                                                    
               Section 6662(c) provides that the term "negligence" includes           
          any failure to make a reasonable attempt to comply with the                 
          provisions of the Internal Revenue laws, and the term "disregard"           
          includes any careless, reckless, or intentional disregard of                
          rules or regulations.  Negligence is the lack of due care or                
          failure to do what a reasonable and ordinarily prudent person               
          would do under the circumstances and includes any failure to keep           
          adequate books and records or to substantiate items properly.               
          Neely v. Commissioner, 85 T.C. 934, 947 (1985); sec. 1.6662-                
          3(b)(1), Income Tax Regs.                                                   
               However, under section 6664(c), no penalty shall be imposed            
          under section 6662(a) with respect to any portion of an                     






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011