Daniel and Kristen Panice - Page 9




                                        - 9 -                                         
          bases of more than 400 percent of the amount determined to be the           
          correct adjusted bases.  Keller v. Commissioner, T.C. Memo. 2006-           
          131; Jaroff v. Commissioner, T.C. Memo. 2004-276; see Zirker v.             
          Commissioner, 87 T.C. 970 (1986); see also McDonough v.                     
          Commissioner, supra.  In that petitioners’ resulting underpayment           
          of tax for 1992 exceeded $5,000, we conclude that their                     
          underpayment of 1992 tax resulting from the disallowance of their           
          reported cost bases and depreciation deduction was attributable             
          to a gross valuation misstatement of over $5,000.  Massengill v.            
          Commissioner, 876 F.2d 616 (8th Cir. 1989), affg. T.C. Memo.                
          1988-427; Zirker v. Commissioner, supra; Jaroff v. Commissioner,            
          supra; see also McDonough v. Commissioner, supra.  We thus also             
          conclude that petitioners are liable for the 40-percent accuracy-           
          related penalty under section 6662(h) for 1992, unless they meet            
          the section 6664(c) exception for reasonable cause and good                 
          faith.                                                                      
               Petitioners’ posttrial briefs argue that (among other cases)           
          Gainer v. Commissioner, 893 F.2d 225 (9th Cir. 1990), affg. T.C.            
          Memo. 1988-416, and Todd v. Commissioner, 862 F.2d 540 (5th Cir.            
          1988), affg. 89 T.C. 912 (1987), establish that the accuracy-               
          related penalty under section 6662(h) cannot apply if an asset              
          such as the cattle at issue fail to exist.  We disagree with                
          petitioner’s argument.  The deductions in the two cited cases               
          relied upon by petitioners were disallowed because the relevant             







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next 

Last modified: November 10, 2007