- 21 - proof as to such issue. Bixby v. Commissioner, 58 T.C. 757, 791 (1972). See supra note 6. In researching the trusts before purchase, Mr. and Mrs. Norton read publications from Mr. Crockett, consulted an attorney who had no legal knowledge of trusts, and asked advice from their sister-in-law. Mr. and Mrs. Norton did not contact the IRS or consult an attorney proficient in the area as to the legality of the trusts. A reasonable and prudent person, under the circumstances, would have researched the legality of the scheme rather than rely on the word of the trust promoter. Accordingly, we hold that Mr. and Mrs. Norton are liable for the accuracy- related penalties under section 6662(a). III. Are Mr. and Mrs. Norton Liable for Additions to Tax Under Section 6651(a) for Failure To File in 1994 and 1995? Respondent determined that Mr. and Mrs. Norton are liable for additions to tax pursuant to section 6651(a)(1) for 1994 and 1995. Section 6651(a)(1) imposes an addition to tax for failure to file a return on the date prescribed (determined with regard to any extension of time for filing), unless the taxpayer can establish that such failure is due to reasonable cause and not due to willful neglect. The taxpayer has the burden of proving that the addition is improper. Rule 142(a); United States v. Boyle, 469 U.S. 241, 245 (1985). Mr. and Mrs. Norton offered no evidence showing that their failure to file was due to reasonable cause and not due to willful neglect. Accordingly, we hold thatPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011