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rather than the tax liability ultimately assessed by the
Commissioner, even when income for the preceding year was
fraudulently understated on the return. Mendes v. Commissioner,
121 T.C. 308, 324 (2003). An invalid return, however, for the
previous year will not suffice for purposes of the safe harbor
under section 6654(e)(2). Mendes v. Commissioner, supra.
If petitioner’s 1999 tax return is to be treated as a valid
tax return on which zero liability was reported, despite
respondent’s later deficiency assessment, petitioner might
qualify for the section 6654(e)(2) safe harbor for 2000.
Because, however, the record herein does not include evidence as
to the validity of petitioner’s 1999 income tax return, this safe
harbor is not available to petitioner.
Section 6654(e)(3)(B)(i) and (ii) also provides an exception
to this addition to tax where a taxpayer became disabled during
either the year the estimated tax payments were not made or the
preceding year, and where the tax underpayment is due to
reasonable cause and not due to willful neglect. See Thomas v.
Commissioner, T.C. Memo. 2005-258.
Petitioner was diagnosed with mental distress in 1999, the
year preceding the year in issue. Petitioner, however, has not
shown that his failure to pay estimated tax was due to reasonable
cause.
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