- 19 - section 6662(e), by substituting “400 percent” for “200 percent”. Sec. 6662(h)(2)(A). Pursuant to section 6662(e)(1)(A), as read without the referenced substitution of text, a substantial valuation misstatement occurs if “the value of any property (or the adjusted basis of any property) claimed on any return * * * is 200 percent or more of the amount determined to be the correct amount of such valuation or adjusted basis”. After the referenced substitution of text, a gross valuation misstatement occurs when the value or basis claimed on a return is 400 percent or more of the correct value or basis. e. Reasonable Cause and Good Faith No penalty is imposed under section 6662 to the extent that the taxpayer had reasonable cause for the underpayment of tax and acted in good faith with respect to the underpayment. Sec. 6664(c)(1); see also Hansen v. Commissioner, supra at 1029. The determination of whether a taxpayer acted with reasonable cause and in good faith is made on a case-by-case basis, taking into account all pertinent facts and circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs.; see also Hansen v. Commissioner, supra at 1028-1029. The extent of the taxpayer’s efforts to ascertain his proper tax liability is generally the most important factor. Sec. 1.6664-4(b)(1), Income Tax Regs.; see also Hansen v. Commissioner, supra at 1028-1029.Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: November 10, 2007