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116 T.C. 438, 446 (2001); Estate of Newton v. Commissioner, T.C.
Memo. 1990-208. The taxpayer bears a “heavy burden” of proving
both that the failure was due to reasonable cause and not willful
neglect. United States v. Boyle, supra at 245.
Failure to pay timely is due to “reasonable cause” if the
taxpayer exercised ordinary business care and prudence and was
nevertheless unable or would suffer an undue hardship to pay the
tax by the due date. Id. at 246; Bank of the West v.
Commissioner, 93 T.C. 462, 471 (1989); Estate of Paxton v.
Commissioner, 86 T.C. 785, 819 (1986); sec. 301.6651-1(c),
Proced. & Admin. Regs.
The reasonable cause standard is a one-time test to be
passed or failed at the payment due date. See Indus. Indem. v.
Snyder, 41 Bankr. 882, 883 (E.D. Wash. 1984); see also
Photographic Assistance Corp. v. United States, 82 AFTR 2d 98-
6804, 98-2 USTC par. 50,820 (N.D. Ga. 1998) (failure to offer any
explanation for a failure to pay when due prevents any finding of
reasonable cause). Events occurring after the due date are still
relevant, however, to the reasonable cause determination. See
Estate of Sowell v. United States, 198 F.3d 169 (5th Cir. 1999)
(distinguishes Indus. Indem., stating that, although later
justifications could not stop penalties from accruing, they were
not irrelevant).
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