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31.3402(c)-1, Employment Tax Regs. Petitioner has not
established reasonable cause for failing to make the required
deposits of tax. Therefore, we sustain respondent’s
determination. See Van Camp & Bennion v. United States, 251 F.3d
862 (9th Cir. 2001).
Section 6662(a) imposes an accuracy-related penalty equal to
20 percent of the portion of an underpayment that is attributable
to negligence. Petitioner’s contention that amounts paid to
Kovacevich were not wages is meritless. See Van Camp & Bennion
v. United States, supra at 869 (stating that the reasonable basis
standard is not satisfied by “a return position that is merely
arguable or that is merely a colorable claim”); Spicer Accounting
Inc. v. United States, 918 F.2d 90 (9th Cir. 1990). Petitioner
did not exercise due care in the filing of its return and thus is
liable for the section 6662(a) penalty. Therefore, we sustain
respondent’s determination.
Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
An order denying
petitioner’s motion to dismiss
will be issued, and decision will
be entered under Rule 155.
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Last modified: May 25, 2011