- 9 - explanation as to why this item should be treated as a loan when OTFP records reflected the $32,500 as income. We also note that petitioners’ record of payments from FSZ ($68,920) is approximately consistent with the budget of $65,000. Based on the foregoing we conclude that the $32,500 was not a loan, and respondent’s determination of omitted income is sustained. 2. Section 6651(a)(1) Addition to Tax Respondent determined that petitioners are liable for an addition to file under section 6651(a)(1) for failure to file their return timely. The parties stipulated that petitioners filed the return for the 1997 tax year late, on May 14, 1998. Petitioners have not argued or presented any evidence that would indicate that their failure to file timely was due to reasonable cause. Accordingly, respondent’s determination is sustained. 3. Section 6662(a) Accuracy-Related Penalty Section 6662 provides that if any portion of any underpayment required to be shown on a return is due to negligence or disregard of the rules or regulations, then a taxpayer will be liable for a penalty equal to 20 percent of the underpayment of tax required to be shown on the return that is attributable to the taxpayer’s negligence or disregard of the rules or regulations. Sec. 6662(a) and (b)(1). “Negligence” includes any failure to make a reasonable attempt to comply withPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011