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Code and that the underpayment of tax was not attributable to
negligence. Petitioners claimed an NOL loss carryover in the
amount of $813,814 on the 1999 return. We have concluded that
petitioners incurred a loss from the expropriation of four
parcels of property by the Iranian revolutionary government
sometime in the late 1970s or early 1980s. The issue in this
case is one of timing. Having reviewed the documentary evidence
in this case and considered the testimony of petitioner, we are
satisfied that he reasonably believed that there was some hope in
recovering some of the expropriated properties or of receiving
some compensation for same. While we have concluded that there
was not a reasonable prospect of recovery in 1995, that
conclusion is based on an analysis of legal precedent relating to
the 1979 revolution in Iran. We do not believe petitioners acted
recklessly or intentionally disregarded the tax laws in a manner
sufficient to apply the accuracy-related penalty. Accordingly,
we hold for petitioners on the section 6662(a) penalty.
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