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Commissioner, 116 T.C. 438, 449 (2001).
Here, respondent has satisfied his burden of production by
showing that petitioners’ understatement was substantial as it
exceeded the requisite statutory amount. Petitioners have not
established that their failure to pay Federal income tax
liability in full was due to a reasonable cause. The record is
devoid of any reliable evidence in favor of the conclusion urged
by petitioners; namely, that the excess bank deposit amount was
not subject to U.S. tax. Petitioners gave inconsistent and
incoherent testimony and failed to comply with the Court’s
requests to have the documents proffered by them properly
translated and certified, so as to render them admissible.
Accordingly, we hold the “reasonable cause” exception
inapplicable and sustain the imposition of the substantial
understatement penalty.
We have considered all arguments made by the parties and
have rejected those arguments not discussed herein as irrelevant
or without merit.
Decision will be entered
for respondent
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