Ozie R. M. Quarterman - Page 14

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          and her husband filed a joint return in 1994 as well as in                  
          1996".12                                                                    
               Petitioner’s argument, based upon reasonable cause and lack            
          of willful neglect, is without merit.  “Except in very limited              
          circumstances not applicable in this case, see sec.                         
          6654(e)(3)(B), section 6654 provides no exception for reasonable            
          cause or lack of willful neglect.”  Mendes v. Commissioner, 121             
          T.C. 308, 323 (2003).  However, because petitioner and Mr.                  
          Quarterman did file a joint return for 1994, petitioner may rely            
          on the safe harbor provided by section 6654(d)(1)(B)(ii), which             
          limits the amount of the “required annual payment” to “100                  
          percent of the tax shown on” that return (i.e., petitioner’s                
          return “for the preceding taxable year”).13                                 




               12  Petitioner apparently acknowledges that neither the safe           
          harbor provided by sec. 6654(d)(1)(B)(i) (which provides, in                
          part, that the “required annual payment” cannot exceed 90 percent           
          of the tax shown on the return for the year in question) nor the            
          exception provided by sec. 6654(e)(1) (the sec. 6654 addition to            
          tax is not imposed if the tax shown on that return, reduced by              
          allowable credits for withholding, is less than $500) is                    
          applicable in this case, presumably, on the ground that the 1995            
          Form 1040 does not constitute a valid return for purposes of                
          either provision.  We agree.  See Mendes v. Commissioner, supra             
          at 322-328 (return filed after issuance of a notice of deficiency           
          is disregarded for purposes of computing the “required annual               
          payment” under sec. 6654(d)(1)(B)(i)); see also Espinoza v.                 
          Commissioner, 78 T.C. at 419-420.                                           
               13  Respondent’s computation of the sec. 6654 addition to              
          tax is based upon a “required annual payment” equal to 90 percent           
          of the $3,390 tax due (see sec. 6654(d)(1)(B)(i)), not upon “the            
          tax shown on” the 1994 joint return.                                        




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