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basis, contemplating all the relevant facts and circumstances.
Sec. 1.6664-4(b)(1), Income Tax Regs.
Here, there is a substantial understatement of tax
attributable to petitioners’ failure to report rental income in
1991. The total understatement and the amount required to be
shown on the return was $17,097. The amount of the
understatement attributable to the unreported rental income was
$13,823.
There is no evidence in the record that respondent was
erroneous in the application and computation of the accuracy-
related penalty. Petitioners offered no argument or excuse for
their failure to report the rental income. Accordingly, we hold
that respondent was not erroneous in his determination of a
penalty. See Esposito v. Commissioner, T.C. Memo. 2001-131.
Decision will be
entered for respondent.
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