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Petitioners’ tax return for 1994 was due April 17, 1995. It
was prepared and dated April 12, 1995, by Accufast. The return was
signed by petitioners on September 12, 1995, and filed a year later
on September 16, 1996.
Petitioners’ tax return for 1995 was due April 15, 1996. It
was prepared and dated November 18, 1996, by a representative of
J.E. & Assoc. The 1995 return was signed by petitioners on the
same date, but not filed until July 30, 1997.
At trial, petitioner offered no reasonable explanation for
petitioners’ failure to timely file their 1993 and 1994 Federal
income tax returns. When asked why his 1995 Federal income tax
return was also filed late, petitioner replied: “Well, I’ve got no
excuse for that. You know, I’ll be honest with you.”
Petitioners failed to show that they exercised ordinary care
and prudence in this case. Accordingly, petitioners are liable for
the additions to tax under section 6651(a)(1) for 1993, 1994, and
1995. Respondent’s determination on this issue is sustained.
IV. Section 6662(a) Penalty
Pursuant to section 6662(a), a taxpayer may be liable for a
penalty of 20 percent on the portion of an underpayment of tax
attributable to a substantial understatement of tax. Sec.
6662(b)(1).
The accuracy-related penalty is not imposed with respect to
any portion of the understatement as to which the taxpayer acted
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