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the provisions of the Code. Sec. 6662(c). “Disregard” includes
any careless, reckless, or intentional disregard. Id.
The penalties provided for in section 6662 will not 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.
Sec. 6664(c)(1). Whether the taxpayer has acted with reasonable
cause and in good faith is determined by relevant facts and
circumstances, including the taxpayer’s own efforts to assess his
proper tax liability. Stubblefield v. Commissioner, T.C. Memo.
1996-537; sec. 1.6664-4(b), Income Tax Regs.
There is no support in this record that the payment
petitioners received was a loan. There is nothing in the record
that indicates that the underpayment was due to reasonable cause
or that petitioners acted in good faith. Respondent is sustained
on this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011