- 7 - aside from a few summary schedules, presented no evidence to support the claimed loss or the underlying expenses listed on the Schedule C. Furthermore, early in 1999 petitioner admitted to two agencies of the Wisconsin State government that Daybreak had not engaged in any business activity since 1995 and was "nonexistent". Petitioner has not explained how Daybreak could incur trade or business expenses in 1999 if it was not engaged in a trade or business and was nonexistent. The Court therefore upholds respondent's disallowance. Accuracy-Related Penalty Section 6662(a) imposes a 20-percent penalty on the portion of an underpayment attributable to any one of several factors, including negligence or disregard of rules or regulations and a substantial understatement of income tax. See sec. 6662(b)(1) and (2). "Negligence" includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code, including any failure to keep adequate books and records or to substantiate items properly. A "substantial understatement" includes an underpayment of tax of $5,000 or more. See sec. 6662(c) and (d); secs. 1.6662-3(b)(1) and 1.6662-4(b), Income Tax Regs.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011