- 14 - business deductions, that failure, on this record, does not rise to the level of being fraudulent. Accordingly, we hold that respondent has failed to show by clear and convincing evidence that petitioner is liable for the 75-percent fraud penalty under section 6663(a). IV. Is Petitioner Liable for the Failure to File Penalty for Taxable Year 1991? Section 6651(a)(1) provides for an addition to tax of 5 percent of the tax required to be shown on a return for each month or fraction thereof for which there is a failure to file, not to exceed 25 percent. A taxpayer may avoid this addition to tax if it can be shown (1) that the failure did not result from willful neglect, and (2) that the failure was due to reasonable cause. See United States v. Boyle, 469 U.S. 241, 245 (1985). Here, petitioner does not deny that he failed to file his 1991 income tax return until 1994. The circumstances in which petitioner found himself when the 1991 return was due (April 15, 1992) were precarious; i.e., petitioner had been indicted for Medicaid fraud and he had failed to report his business income in returns filed for 1989 and 1990. Accordingly, although petitioner has provided a reason for intentionally failing to file, he has not provided a reason for which his failure to file can be excused. Accordingly, we hold that petitioner is liable for a 25 percent section 6651 addition to tax for 1991.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011