- 17 -
all additions to tax.
In the alternative, petitioners contend that respondent
should abate the addition to tax for late payment that accrued
from March 27 through July 30, 2003.10 Petitioners assert that
they would have paid their outstanding tax liabilities on or
about March 27, 2003, but that respondent failed to timely
provide them with an escrow demand letter. Petitioners’
contention is misplaced.
Section 6651(a)(2) imposes an addition to tax for failure to
pay the amount shown as tax on the return on or before the date
prescribed for payment of that tax, unless the failure was due to
reasonable cause and not willful neglect. See sec. 301.6651-
1(c)(1), Proced. & Admin. Regs. Petitioners may demonstrate
reasonable cause for late payment by showing that they exercised
ordinary business care and prudence in providing for payment of
their tax liability and were nevertheless either unable to pay
the tax or would suffer an undue hardship if they paid on the due
date. Sec. 301.6651-1(c), Proced. & Admin. Regs.
At the time that petitioners filed their returns, they
failed to remit the amount shown as tax. Based on the entirety
10 Petitioners concede that they are liable for the
additions to tax for failure to timely file and for failure to
pay estimated tax. Petitioners, however, contend that respondent
should have also abated the addition to tax for failure to pay
from July 31 to Nov. 30, 2003. We note that this addition for
those years did not accrue for that period. See sec. 6651(a)(2).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011