- 9 -
losses from day trading are deductible from his ordinary income.
There is no reasonable basis for his treatment of the losses as
ordinary. Thus there is no reduction of petitioner’s
understatement of tax that is subject to the section 6662(a)
penalty. See sec. 6662(d)(2)(B).
The accuracy-related penalty under section 6662(a) is not
imposed with respect to any portion of the underpayment as to
which the taxpayer acted with reasonable cause and in good faith.
Sec. 6664(c)(1). The decision as to whether a taxpayer acted
with reasonable cause and in good faith is made by taking into
account all of the pertinent facts and circumstances. Sec.
1.6664-4(b)(1), Income Tax Regs. Relevant factors include the
taxpayer’s efforts to assess his or her proper tax liability,
including the taxpayer’s reasonable and good faith reliance on
the advice of a tax professional. See id. Petitioner has
presented no evidence that he acted in reasonable reliance on the
advice of a tax professional in asserting the position taken on
his returns or that he otherwise acted with reasonable cause or
in good faith. Therefore, the penalties for substantial
understatement of tax are sustained for 2000, 2001, and 2002.
To reflect the foregoing,
Decision will be entered
under Rule 155.
Page: Previous 1 2 3 4 5 6 7 8 9
Last modified: May 25, 2011