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exercised ordinary business care and prudence but nevertheless
was unable to file the return within the prescribed time.
Reasonable cause for the failure to pay the tax may be shown
where the taxpayer has made a satisfactory showing that he
exercised ordinary business care and prudence in providing for
payment of his tax liability and was nevertheless either unable
to pay the tax or would suffer an undue hardship if he paid on
the due date. Sec. 301.6651-1(c)(1), Proced. & Admin. Regs.
Petitioner does not dispute that he filed his returns late
and that the taxes shown on the returns remained unpaid as
reflected in respondent’s records. Petitioner contends that his
failure to file returns timely and timely pay taxes was due to
personal circumstances during the years at issue and that these
circumstances constituted reasonable cause for purposes of
section 6651(a). Specifically, petitioner claims that his
marriage was ending, the firms he was associated with were
collapsing around him, or not following through on promised
remuneration, and he was in the midst of a significantly
over-budget rehabilitation project on a dream home that
almost immediately upon completion he was forced to sell due
to the divorce. This occurred all while trying to assure
his family’s needs were met.
The record shows that petitioner requested extensions of
time to file in each of the tax years at issue. Thus, there is
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Last modified: November 10, 2007