- 13 -
determination regarding petitioners’ filing status for the years
in issue.12
II. Section 6662 Penalties
Pursuant to section 6662(a), a taxpayer may be liable for a
penalty of 20 percent on the portion of an underpayment of tax
due to negligence or disregard of rules or regulations.13 Sec.
6662(b). Section 6664(c)(1) provides that no accuracy-related
penalty shall be imposed with respect to any portion of an
underpayment if it is shown that there was reasonable cause for
such portion and that the taxpayer acted in good faith with
respect to such portion. The decision as to whether the taxpayer
acted with reasonable cause and in good faith depends upon all
11(...continued)
annulment only 1 month before Ms. Yeager filed her bankruptcy
petition. Up until that time, and since that time, petitioners
held themselves out as being married. Furthermore, as we
previously stated, in order to obtain the annulment petitioners
supplied incorrect information to the Texas State court. Their
attempt to claim that they were not married as a result of the
Decree of Annulment does not promote the purposes for which the
relation back doctrine was intended.
12 Petitioners also argue that respondent ignores his own
rulings, i.e., Rev. Rul. 76-255, 1976-2 C.B. 40, regarding the
effect of their annulment. We disagree. Petitioners’ situation
is factually similar to situation 2 in the revenue ruling--
applying the sham transaction doctrine to taxpayers who divorced
because it would be advantageous for them to be unmarried at the
end of the calendar year, but who never intended to remain
unmarried and did not remain unmarried. See Boyter v.
Commissioner, 668 F.2d 1382, 1387 (4th Cir. 1981).
13 Sec. 7491(c) is not applicable to these cases. See
supra note 8.
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