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and in good faith is made on a case-by-case basis, taking into
account all the pertinent facts and circumstances. Sec. 1.6664-
4(b)(1), Income Tax Regs. The most important factor is the
extent of the taxpayer’s effort to assess his proper tax
liability for the year. Id.
It is clear that petitioner was negligent with respect to
the disallowed deductions for Schedule C wages. Petitioner did
not keep adequate books and records or otherwise substantiate the
deductions reported on Schedule C, as required by the Internal
Revenue Code. Amounts that were allegedly paid to his children
always remained in his control. We sustain respondent’s
determination with respect to the section 6662(a) accuracy-
related penalty.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011