- 5 -
When petitioners' returns were thereafter audited by
respondent, all correspondence they received was referred to Mr.
Beltran, who had promised he "would take care of it". There is
no indication in the record that Mr. Beltran provided any
assistance to petitioners in the audit process.3
Petitioners contend they should be absolved of liability for
the section 6662(a) penalties because they relied on the
representations of their return preparer.
Section 6662(a) provides for an accuracy-related penalty
equal to 20 percent of any portion of an underpayment of tax
required to be shown on the return that is attributable to the
taxpayer's negligence or disregard of rules or regulations. Sec.
6662(a) and (b)(1). Negligence consists of any failure to make a
reasonable attempt to comply with the provisions of the Internal
Revenue Code and disregard consists of any careless, reckless, or
intentional disregard. Sec. 6662(c). The courts have refined
the Code definition of negligence as a lack of due care or
failure to do what a reasonable and prudent person would do under
similar circumstances. Allen v. Commissioner, 925 F.2d 348, 353
(9th Cir. 1991), affg. 92 T.C. 1 (1989). Section 1.6662-3(b)(1),
Income Tax Regs., provides that "Negligence is strongly indicated
3 This case is one of numerous cases heard by the Court
involving tax returns prepared by Mr. Beltran, which essentially
involve the same deductions. At some point in the audit process,
Mr. Beltran ceased all communications with his former clients.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011