Jerome P. and Rhonda A. Reimann - Page 10

                                        - 9 -                                         

          apply to any underpayment attributable to negligence or disregard           
          of rules or regulations.                                                    
               Section 6662(c) provides that the term "negligence" includes           
          any failure to make a reasonable attempt to comply with the                 
          provisions of the internal revenue laws, and the term "disregard"           
          includes any careless, reckless, or intentional disregard of                
          rules or regulations.  Negligence is the lack of due care or                
          failure to do what a reasonable and ordinarily prudent person               
          would do under the circumstances.  Neely v. Commissioner, 85 T.C.           
          934, 947 (1985).  Under section 6664(c), no penalty shall be                
          imposed under section 6662(a) with respect to any portion of an             
          underpayment if it is shown that there was a reasonable cause for           
          such portion and that the taxpayer acted in good faith with                 
          respect to such portion.  The determination of whether a taxpayer           
          acted with reasonable cause and in good faith depends upon the              
          facts and circumstances of each particular case.  Sec. 1.6664-              
          4(b)(1), Income Tax Regs.  Relevant factors include the                     
          taxpayer's efforts to assess his or her proper tax liability, the           
          knowledge and experience of the taxpayer, and the taxpayer's                
          reliance on the advice of a professional, such as an accountant.            
          See Drummond v. Commissioner, T.C. Memo. 1997-71, affd. in part             
          and revd. in part without published opinion 155 F.3d 558 (4th               
          Cir. 1998).  However, the most important factor is the extent of            
          the taxpayer's effort to determine the taxpayer's proper tax                





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011