- 11 - The final issue is respondent’s determination that petitioners are liable for the section 6662(a) accuracy-related penalty. Section 6662(a) imposes an accuracy-related penalty in the amount of 20 percent on any portion of an underpayment of tax that is attributable to causes set forth in subsection (b). However, 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 the underpayment and that the taxpayer acted in good faith with respect to the underpayment. The determination of whether a taxpayer acted with reasonable cause and in good faith is made on a case-by-case basis. Sec. 1.6664-4(b), Income Tax Regs. The most important factor is the extent of the taxpayer’s effort to assess the taxpayer’s proper tax liability. See id. An honest misunderstanding of fact or law that is reasonable in light of the experience, knowledge, and education of the taxpayer may indicate reasonable cause and good faith. Remy v. Commissioner, T.C. Memo. 1997-72. Here, petitioner is an attorney with a specialized degree in tax law who was employed as an auditor by the IRS for several years. His education, knowledge, and experience in that field place him in a category that fewPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011