Mona L. Purcell - Page 6




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          the term "disregard" includes any careless, reckless, or                    
          intentional disregard.  Sec. 6662(c).                                       
               The accuracy-related penalty will not apply if petitioner              
          demonstrates that there was reasonable cause for the underpayment           
          and that she acted in good faith with respect to the                        
          underpayment.  See sec. 6664(c).  Whether a taxpayer acted with             
          reasonable cause and good faith depends on the pertinent facts              
          and circumstances.  See McCallson v. Commissioner, T.C. Memo.               
          1993-528; sec. 1.6664-4(b)(1), Income Tax Regs.                             
               Neither petitioner nor respondent argued or produced any               
          evidence indicating that petitioner had knowledge of the                    
          overpayments prior to filing her 1999 Federal tax return.  During           
          trial the Court asked petitioner why she did not report the                 
          Social Security benefits.  Petitioner's response provided no                
          legally significant reason; she claimed that she did not know she           
          needed to report Social Security benefits as income and that she            
          was "naive".  She concluded by stating that "I'm definitely at              
          fault for that."                                                            
               The Court finds that petitioner failed to make a reasonable            
          attempt to determine whether she should report any portion of the           
          Social Security benefits she received in 1999.  Further,                    
          petitioner failed to produce any evidence to show that she acted            
          with reasonable cause and good faith for the year at issue.  The            








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