- 19 - frivolous tax-protester arguments. Petitioners are not entitled to deductions for business expenses that are completely unsubstantiated. Ronnen v. Commissioner, 90 T.C. 74, 102 (1988). Petitioners have failed to meet their burden of proof with respect to the amounts reported on the Schedules C that were disallowed in the notice of deficiency. Thus, petitioners are not entitled to any amounts claimed for returns and allowances, cost of goods sold, or business expense deductions reported on the Schedules C for the year at issue. Respondent is sustained on this issue. 4. Section 6651(a)(1) Addition to Tax Respondent determined an addition to tax as a result of petitioners’ failure to timely file their Federal income tax return for the year at issue. Section 6651(a)(1) imposes an addition to tax for failure to file a timely tax return. The addition to tax is equal to 5 percent of the amount of the tax required to be shown on the return if the failure to file is not for more than 1 month. Sec. 6651(a)(1). An additional 5 percent is imposed for each month or fraction thereof in which the failure to file continues, to a maximum of 25 percent of the tax. Id. The addition to tax is imposed on the net amount due. Sec. 6651(b). The addition to tax is applicable unless a taxpayer establishes that the failure to file was due to reasonable causePage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011