Richards Asset Management Trust, et al. - Page 19




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               Section 6662(a) imposes an accuracy-related penalty equal to           
          20 percent of the underpayment of tax resulting from, inter alia,           
          negligence or disregard of rules or regulations, sec. 6662(b)(1),           
          or a substantial understatement of income tax, sec. 6662(b)(2).             
          For purposes of section 6662(a), an understatement is equal to              
          the excess of the amount of tax required to be shown in the tax             
          return over the amount of tax shown in the tax return, sec.                 
          6662(d)(2)(A), and is substantial in the case of an individual if           
          it exceeds the greater of 10 percent of the tax required to be              
          shown in the return or $5,000, sec. 6662(d)(1)(A).  For purposes            
          of section 6662(a), the term “negligence” includes any failure to           
          make a reasonable attempt to comply with the Code, and the term             
          “disregard” includes any careless, reckless, or intentional                 
          disregard.  Sec. 6662(c).  Negligence has also been defined as a            
          lack of due care or failure to do what a reasonable person would            
          do under the circumstances.  Leuhsler v. Commissioner, 963 F.2d             
          907, 910 (6th Cir. 1992), affg. T.C. Memo. 1991-179; Antonides v.           
          Commissioner, 91 T.C. 686, 699 (1988), affd. 893 F.2d 656 (4th              
          Cir. 1990).                                                                 
               The accuracy-related penalty under section 6662(a) does not            
          apply to any portion of an underpayment if it is shown that there           
          was reasonable cause for, and that the taxpayer acted in good               
          faith with respect to, such portion.  Sec. 6664(c)(1).  The                 
          determination of whether the taxpayer acted with reasonable cause           






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