-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 substantialPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011