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taxpayer’s effort to assess his proper tax liability for the
year. Id. “Circumstances that may indicate reasonable cause and
good faith include an honest misunderstanding of fact or law that
is reasonable in light of all of the facts and circumstances,
including the experience, knowledge, and education of the
taxpayer.” Id.
In the instant case, the record demonstrates that
petitioners used computer software to maintain business records
for Kingdom Kreations during the years in issue and that they
delegated responsibility for maintaining the business records to
employee Monica Mann, who was unavailable to testify. As noted
above, petitioners required the assistance of Mr. Yusem to access
their electronically stored business records and file their 2000
and 2001 tax returns. Mr. Yusem testified credibly that the
amounts reported on petitioners’ tax returns were taken directly
from petitioners’ electronic records. Furthermore, Agent Gomez
testified that petitioner was “very cooperative” during the
audit. Based on the foregoing, we are satisfied that petitioners
maintained business records to the best of their ability and that
the information reported on their 2000 and 2001 tax returns
reflects the amounts recorded in such business records. We
conclude that petitioners made a substantial effort to assess
their proper tax liabilities for the years in issue and,
consequently, that petitioners acted with reasonable cause and in
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