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percent of the amount of tax required to be shown on the return
if the failure to file is not for more than 1 month. See sec.
6651(a)(1). An additional 5 percent is imposed for each month or
fraction thereof in which the failure to file continues, to a
maximum of 25 percent. See id. Section 6651(a)(2) provides for
an addition to tax of 0.5 percent per month, up to 25 percent for
failure to pay the amount shown or required to be shown on a
return. A taxpayer may be subject to both paragraphs (1) and
(2), in which case the amount of the addition to tax under
section 6651(a)(1) is reduced by the amount of the addition to
tax under section 6651(a)(2) for any month to which an addition
to tax applies under both paragraphs (1) and (2). The combined
amounts under paragraph (1) and paragraph (2) cannot exceed 5
percent per month. Sec. 6651(c)(1).
The additions to tax under section 6651(a)(1) and (2) are
imposed unless the taxpayer establishes that the failure to file
and/or pay was due to reasonable cause and not willful neglect.
United States v. Boyle, 469 U.S. 241, 245 (1985); Heman v.
Commissioner, 32 T.C. 479, 489-490 (1959), affd. 283 F.2d 227
(8th Cir. 1960). “Reasonable cause” requires the taxpayer to
demonstrate that he exercised ordinary business care and
prudence. United States v. Boyle, supra at 246. “Willful
neglect” is defined as a “conscious, intentional failure or
reckless indifference.” Id. at 245.
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Last modified: May 25, 2011