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2. Whether Petitioners Properly Estimated Their Tax
Petitioners contend that they estimated their tax with
reasonable care on Form 4868 for 1998. Petitioners estimated
that their tax liability for 1998 was $41,000, which they paid
when they filed their Form 4868. This amount was less than one-
half of their actual liability. They contend that their error in
underreporting $135,422 on their extension request and their
original 1998 return was attributable to Lewellen, not to
petitioners.
We disagree. Lewellen credibly testified that he was
unaware that petitioner had received client fees of $135,422 in
1998 until petitioner telephoned him shortly after the original
1998 return was filed. Lewellen did not know that petitioners
improperly deducted $27,000 of personal expenses as business
expenses on their 1998 return. Petitioners’ failure to properly
estimate their 1998 tax liability invalidates their extension.
3. Whether Petitioners Are Liable for an Addition to Tax
for Failure To Timely File and Pay Under Section
6651(a)(1) and (2)
Section 6651(a)(1) provides for an addition to tax up to 25
percent for failure to timely file Federal income tax returns.
Section 6651(a)(2) provides for an addition to tax for failure to
pay taxes shown on a return on or before the payment due date.
The additions to tax under section 6651(a)(1) and (2) do not
apply if the failure was due to reasonable cause and not willful
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