Claudia J. Miner - Page 12




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          affg. in part, and remanding T.C. Memo. 1988-264; Gundotra v.               
          Commissioner, T.C. Memo. 1995-303, affd. 149 F.3d 1168 (4th Cir.            
          1998).                                                                      
               3.   Conclusion                                                        
               Petitioner invested in securities in 1996-98.  The margin              
          interest she paid to Dain Rauscher is investment interest which             
          she may deduct under section 163(h)(2)(B) for 1996-98 to the                
          extent of her net investment income for those years.  Sec.                  
          163(d).                                                                     
          C.   Whether Petitioner Is Liable for Additions to Tax for                  
               1996-98                                                                
               1.   Failure To File Returns                                           
               A taxpayer is liable for an addition to tax of up to 25                
          percent for failure to file a Federal income tax return unless              
          the failure was due to reasonable cause and not willful neglect.            
          Sec. 6651(a)(1); United States v. Boyle, 469 U.S. 241, 245                  
          (1985).                                                                     
               In court proceedings arising in connection with examinations           
          beginning after July 22, 1998, section 7491(c) places on the                
          Commissioner the burden of producing evidence showing that it is            
          appropriate to impose the addition to tax under section                     
          6651(a)(1).  Petitioner did not file returns for 1996-98.  Thus,            
          respondent has shown that the section 6651(a)(1) addition to tax            
          applies, unless petitioner proves that her failure to file was              







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