Attorney-at-Law

GOOD IN PARTS

In Uncategorized on 08/05/2019 at 17:46

Like the famous curate’s egg in 19th Century English humor, an accountant’s advice can be good in parts. At least, good enough to avoid Section 6662 chops, in part.

Rodrigo Kho and Loreta Kho, 2019 T. C. Sum. Op. 18, filed 8/5/19, is the usual unsubstantiated deductions story, but CSTJ Lewis (“Love That Name”) Carluzzo salvages some business home use deductions.

But the kicker is the accountant and CSTJ Lew’s salvage operation.

“Considering all the facts and circumstances, including petitioners’ good- faith reliance on the assistance of an accountant in preparing their tax returns for the years in issue, we conclude that petitioners have shown reasonable cause and that they acted in good faith in respect of the portions of the underpayments that are attributable to the disallowance of deductions for depreciation and business use of home expenses claimed on their Schedules C for [Year A and Year B] and the dependency exemption deductions claimed for [Year B] Therefore, we hold that petitioners are not liable for section 6662(a) accuracy-related penalties in respect of those portions of the underpayments. In contrast, petitioners’ explanations for claiming personal expenses as business expenses on their Schedules C and their failure to substantiate payments of the ‘qualified tuition and related expenses’ shown on the Form 8863 and charitable contributions for [Year A and Year B] do not demonstrate that they acted with reasonable cause and in good faith with respect to the portions of the underpayments attributable to those adjustments, and we, therefore, conclude that petitioners are liable for the penalties in respect of those portions of the underpayments.” 2019 T. C. Sum. Op. 18, at pp. 23-24.

 

 

 

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