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tax returns by April 15, following the close of the calendar
year. Petitioner’s 2001 return, due April 15, 2002, was not
filed with the IRS until April 23, 2002. The return, therefore,
was filed late. Petitioner presented no evidence to establish
reasonable cause for the delinquent filing of his return.
Respondent, therefore, is sustained on this issue.
The final issue is respondent’s determination that
petitioner is liable for the penalty under section 6662(a).
Section 6662(a) imposes an accuracy-related penalty in the
amount of 20 percent of any portion of an underpayment of tax
that is attributable to causes set forth in subsection (b).
However, under section 6664(c), no penalty shall be imposed under
section 6662(a) with respect to any portion of an underpayment if
it is shown that there was a reasonable cause for the
underpayment and that the taxpayer acted in good faith with
respect to the underpayment.
Section 6662(b)(2) provides that the penalty is applicable
where there is a substantial understatement of tax.
A substantial understatement exists where the amount of the
understatement exceeds the greater of 10 percent of the tax
required to be shown on the return for the taxable year or
$5,000. Sec. 6662(d). The understatement is reduced by the
portion of the understatement attributable to an item for which
there was either substantial authority for its treatment or
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