- 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011