Walter Joseph Hess - Page 4

                                        - 3 -                                         
          rental, and partnership income and was liable for the section               
          6651(a)(1) addition to tax for failure to file a return and                 
          section 6662(a) accuracy-related penalty.                                   
               On January 31, 2005, petitioner, while residing in                     
          Chillicothe, Ohio, filed his petition with this Court.                      
                                     Discussion                                       
               Respondent bears, and has met, the burden of production                
          relating to the section 6651(a)(1) addition to tax and has                  
          established that petitioner failed to file his return on time.              
          Sec. 7491(c);  Higbee v. Commissioner, 116 T.C. 438, 446 (2001).            
          Petitioner failed to establish, pursuant to section 6651(a)(1),             
          that such failure was due to reasonable cause and not willful               
          neglect.  Accordingly, we sustain respondent’s determination.               
               Respondent also bears the burden of production relating to             
          the section 6662(a) accuracy-related penalty.  Sec. 7491(c); Rule           
          142(a).  Section 6662(a) imposes a penalty equal to 20 percent of           
          the amount of any underpayment attributable to a substantial                
          understatement of income tax.  Sec. 6662(b)(2).  An                         
          understatement is the amount by which the correct tax exceeds the           
          tax reported on the return.  Sec. 6662(d).  The understatement is           
          substantial if it exceeds the greater of $5,000 or 10 percent of            
          the tax required to be shown on the return.  Sec.                           
          6662(d)(1)(A)(i) and (ii).  Respondent conceded that petitioner             







Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011