-10-
Respondent determined that petitioners are liable for
accuracy-related penalties under section 6662(a) and (b)(1) for
2000 and 2001. Section 6662(a) imposes an accuracy-related
penalty equal to 20 percent of the portion of an underpayment
that is attributable to, among other things, negligence.
Petitioners will avoid this accuracy-related penalty if the
record shows that they were not negligent; i.e., they made a
reasonable attempt to comply with the provisions of the Code, and
they were not careless, reckless, or in intentional disregard of
rules or regulations. See sec. 6662(c); Keeler v. Commissioner,
243 F.3d 1212, 1221 (10th Cir. 2001), affg. Leema Enters. Inc. v.
Commissioner, T.C. Memo. 1999-18. Negligence connotes a lack of
due care or failure to do what a reasonable and prudent person
would do under the circumstances. See Allen v. Commissioner, 92
T.C. 1 (1989), affd. 925 F.2d 348 (9th Cir. 1991); Neely v.
Commissioner, 85 T.C. 934, 947 (1985). An accuracy-related
penalty is not applicable to any portion of an underpayment to
the extent that an individual has reasonable cause for that
portion and acts in good faith with respect thereto. See sec.
6664(c)(1).
5(...continued)
we note it does not apply to this case. Under the Cohan rule,
the Court can estimate the amount of certain deductible expenses,
but only if the taxpayer presents sufficient evidence to make
those estimates. See id. at 543-544. Petitioners have not
presented sufficient evidence for us to apply the Cohan rule.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: November 10, 2007