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important factor is the extent of the taxpayer’s efforts to
assess the proper tax liability. See Stubblefield v.
Commissioner, T.C. Memo. 1996-537; sec. 1.6664-4(b)(1), Income
Tax Regs. Section 1.6664-4(b)(1), Income Tax Regs., specifically
provides: “Circumstances that may indicate reasonable cause and
good faith include an honest misunderstanding of fact or law that
is reasonable in light of all of the facts and circumstances,
including the experience, knowledge, and education of the
taxpayer.”
On the basis of the record, we conclude that petitioner is
liable for the accuracy-related penalty under section 6662(a).
Respondent has met his burden of production under section 7491(c)
with the Form 1099-MISC and various checks made by Automotive
Emporium during the 2000 taxable year. We are satisfied that
petitioner omitted income from his return for the taxable year
2000. Petitioner failed to provide a reasonable or credible
explanation as to why the income was not reported on his income
tax return. Petitioner has not established that the underpayment
was due to reasonable cause or that petitioner acted in good
faith. Accordingly, we sustain respondent on this adjustment.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011