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the amount of the tax which is paid on or before such month.
Sec. 6651(b)(2).
The amount of the addition to tax under paragraph (1)
generally is reduced by the amount of the addition to tax under
paragraph (2) with respect to each month in which both are
otherwise applicable. Sec. 6651(c)(1).
A taxpayer may avoid the additions to tax under one or both
paragraphs if he establishes that the failure to file and/or pay
is due to reasonable cause and not due to willful neglect. Sec.
6651(a)(1) and (2). “Reasonable cause” requires the taxpayer to
demonstrate that he exercised ordinary business care and prudence
and was nonetheless unable to file a return within the prescribed
time. United States v. Boyle, 469 U.S. 241, 246 (1985).
“Willful neglect” means a conscious, intentional failure or
reckless indifference. Id. at 245.
Petitioner filed returns for taxable years 1995 and 1996 in
October 1999, after respondent had already prepared a substitute
return and issued a notice of deficiency for each year.
Petitioner testified that during the relevant time period, he was
in and out of the hospital and “didn’t know where I was at, what
I was doing.” However, at the same time petitioner was divorced
and remarried, and was able to continue his employment as well as
operate a small business. Petitioner also was able to request
extensions of time to file his tax returns for both 1995 and
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Last modified: May 25, 2011