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IV. Accuracy-Related Penalty
Respondent’s notice of deficiency imposed an accuracy-
related penalty on petitioner pursuant to section 6662(a) because
petitioner’s underpayment of tax was attributable to negligence
or disregard of rules or regulations. See sec. 6662(b)(1).
However, section 6664(b) provides that an accuracy-related
penalty under section 6662 is applicable only where a return has
been filed. In Williams v. Commissioner, 114 T.C. 136, 143
(2000), we held that a taxpayer is not liable for a section
6662(a) penalty if we find that the taxpayer’s return was
invalid. See Hart v. Commissioner, T.C. Memo. 2001-306.
In support of respondent’s determination that petitioner was
liable for an addition to tax under section 6651(a)(1),
respondent argued petitioner’s Form 1040 was not a valid return.
After carefully considering the issue supra, we agreed.
Respondent now contends that petitioner is liable for an
accuracy-related penalty with respect to the same Form 1040. It
is illogical and inconsistent with Williams for respondent to
argue that petitioner’s Form 1040 was not a valid return for
section 6651(a)(1) purposes, but that very same return was valid
for purposes of imposing an accuracy-related penalty under
section 6662(a). Therefore, we find that petitioner is not
liable for the accuracy-related penalty under section 6662(a) and
(b)(1).
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Last modified: May 25, 2011