- 7 -
required to make supplemental quarterly payments of estimated
taxes. Sec. 6654(f). Under section 6654(d), the amount of the
four quarterly installments (including taxes withheld) generally
must equal 90 percent of the tax for the year, or 100 percent of
the tax for the preceding taxable year, whichever is less. Where
there is an underpayment of estimated tax, there is no
exonerating provision, such as reasonable cause or lack of
willful neglect. Estate of Ruben v. Commissioner, 33 T.C. 1071
(1960).
As noted earlier, taxes were withheld from petitioner’s
earnings for each of the years in question; therefore,
petitioner’s liability for the section 6654 addition to tax will
depend on whether, after these prepayments are credited and a
further credit is allowed in the Rule 155 computation, because of
respondent’s concession that the $3,186 State income tax refund
received by petitioner during 2002 did not constitute gross
income as determined in the notice of deficiency, the balances
due are within or without the 90-percent rule of section 6654(d).
To that extent, respondent is sustained on this issue.
Respondent filed a motion for imposition of the penalty
under section 6673. Section 6673(a)(1) authorizes this Court to
require a taxpayer to pay a penalty to the United States, in an
amount not to exceed $25,000, whenever it appears that
proceedings have been instituted or maintained by such taxpayer
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011