Jon David Cooksey - Page 8

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          circumstances.  Estate of Hartsell v. Commissioner, T.C. Memo.              
          2004-211; Merriam v. Commissioner, supra.                                   
               The regulations and other administrative guidance provided             
          by respondent concerning reasonable cause for a failure to pay              
          under section 6651(a)(2) are generally directed at the                      
          circumstances surrounding a taxpayer's inability to pay when due,           
          and not defalcations in remitting payment, as occurred in the               
          instant case.  Reasonable cause in the case of failures in                  
          mailing or delivery are addressed in connection with failures to            
          file under section 6651(a)(1), however, and present persuasive              
          analogues, in our view.  Respondent has advised his employees               
          that reasonable cause for a failure to file timely generally                
          exists where a return has been timely mailed but returned for               
          insufficient postage, or sent to the wrong district.  2 Audit,              
          Internal Revenue Manual (CCH), sec. 4562.2 at 14,356 (Feb. 25,              
          1987); see also United States v. Boyle, supra at 243 n.1; McMahan           
          v. Commissioner, 114 F.3d 366, 369 (2d Cir. 1997), affg. T.C.               
          Memo. 1995-547.  However, an important factor bearing upon                  
          reasonable cause is the expeditiousness with which a taxpayer               
          rectifies a mistake, once discovered.  See Internal Revenue                 
          Manual (IRM) sec. 20.1.1.3.1.2 (2) (Aug. 20, 1998) (assessment of           
          ordinary business care and prudence requires consideration of               
          length of time between the event cited as a reason for                      
          noncompliance and subsequent compliance); IRM sec. 20.1.1.3.1.2.3           






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