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Petitioners claim that they provided complete and timely
information to their C.P.A. and that it was the C.P.A. who did
not timely file the income tax returns.
Petitioner, a practicing lawyer, was fully capable of making
sure that the income tax returns for himself, his wife, and his
firm were completed and filed on time. Petitioner’s alleged
reliance on the C.P.A. is not credible.
Petitioners are liable for the additions to tax under
section 6651(a)(1) for the failure to timely file their income
tax returns for the years in issue.
Section 6662 Accuracy-Related Penalties
Section 6662 imposes an accuracy-related penalty of 20
percent on underpayments of tax attributable to: (1) Negligence
or to disregard of the rules or the regulations; and
(2) substantial understatements of income tax.
Section 6662(d)(1) defines “substantial understatements” as
the greater of: (1) More than 10 percent of the tax required to
be shown on the tax return; or (2) $5,000 in the case of an
individual, and $10,000 in the case of a corporation.
The section 6662 accuracy-related penalty is not imposed
with respect to portions of underpayments of tax for which
taxpayers acted with reasonable cause and in good faith. See
sec. 6664(c)(1). The decision as to whether taxpayers acted with
reasonable cause and in good faith depends upon all the pertinent
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Last modified: May 25, 2011