- 9 -
worksheet provided by her employer clearly showed that the
$3,759.87 paid by Authentic Fitness, on her behalf, to her moving
company was not included in her wages. On that basis, and the
basis that Authentic Fitness, not petitioner, paid the moving
company directly, petitioner had no reason to believe she was
entitled to a deduction for that expense. Petitioner’s actions
with respect to that portion of her deduction amount were
unreasonable under section 6662(c), and her actions are
considered by the Court to be “careless, reckless, or intentional
disregard”. The section 6662(a) penalty is sustained with
respect to that portion of the deduction.
Concerning the remainder of her deduction, petitioner did
not act unreasonably. Although her stay at Embassy Suites was
not deductible as a moving expense, petitioner took reasonable
steps to ensure it was. Petitioner consulted a tax planner when
preparing her income tax return, and there is no evidence that
she disregarded his advice.3 Petitioner had every reason to
believe a professional tax planner would know what moving
expenses could be deducted under section 217. Petitioner was not
unreasonable or negligent in relying on the tax planner's expert
advice. Therefore, the section 6662(a) penalty only applies to
$3,759.87 of the understatement.
3 The record does not reflect whether petitioner showed
the tax planner the expense worksheet from Authentic Fitness;
therefore, it is not considered in determining whether petitioner
acted reasonably with respect to sec. 6662(a).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011