Michael W. Allen - Page 13

                                        -13-                                          
          $5,000 or 10 percent of the tax required to be shown on his                 
          return.                                                                     
              Year       Tax Reported      Required Tax     Understatement            
              1999         $11,392            $24,161           $12,769               
              2000         13,101             22,604            9,503                 
              2001         8,643              29,455            20,812                
               The accuracy-related penalty under section 6662(a) does not            
          apply to any portion of an underpayment, however, if it is shown            
          that there was reasonable cause for the taxpayer’s position and             
          that the taxpayer acted in good faith with respect to that                  
          portion.  Sec. 6664(c)(1); sec. 1.6664-4(b), Income Tax Regs.               
          The determination of whether a taxpayer acted with reasonable               
          cause and good faith is made on a case-by-case basis, taking into           
          account all the pertinent facts and circumstances, including the            
          taxpayer’s efforts to assess his or her proper tax liability and            
          the knowledge and experience of the taxpayer.  Sec. 1.6664-                 
          4(b)(1), Income Tax Regs.                                                   
               While the Commissioner bears the burden of production under            
          section 7491(c), the taxpayer bears the burden of proof with                
          respect to reasonable cause.  Higbee v. Commissioner, supra at              
          446.                                                                        
               Petitioner failed to report his income from the tribe for              
          his services as a tribal council member in 1999 and 2000, claimed           
          an unexplained adjustment to gross income in 2001, and failed to            
          substantiate deductions he claimed on brief.  Petitioner also               
          failed to present any evidence showing that his substantial                 





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