- 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 Next
Last modified: November 10, 2007