- 9 -
(1946) (“The rule is well established that the failure of a party
to introduce evidence within his possession and which, if true,
would be favorable to him, gives rise to the presumption that if
produced it would be unfavorable.”), affd. 162 F.2d 513 (10th
Cir. 1947); see also Little v. Commissioner, T.C. Memo. 1996-270
(“The Wichita Terminal presumption generally applies where the
party failing to produce the evidence has the burden of proof.”).
Petitioner had the opportunity to call witnesses to testify and
present evidence on his behalf. However, petitioner did neither.
The Court therefore sustains the deficiency determined by
respondent.6
III. Additions to Tax
Section 6651(a) provides for a 5-percent addition to tax for
each month or portion thereof that the tax return is filed late,
not to exceed 25 percent in the aggregate, unless such failure to
file is due to reasonable cause and not due to willful neglect.
Although not defined in the Code, “reasonable cause” is viewed in
the applicable regulations as the “exercise of ordinary business
care and prudence”. Sec. 301.6651-1(c)(1), Proced. & Admin.
Regs; see also United States v. Boyle, 469 U.S. 241, 246 (1985).
“Willful neglect” can be interpreted as a “conscious, intentional
failure or reckless indifference.” United States v. Boyle, supra
at 245. With respect to section 6651(a) additions to tax,
6 This is subject to the agreement between the parties to
reduce the deficiency to $9,282 for 2001 due to petitioner’s
substantiation of certain deductions. See also supra note 2.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011