TAX COURT OPINION

Case: Alfredo K. Wong & Belinda Chee
Docket Number: 26526-08S
Judge: Colvin
Opinion Type: bench
Filed: 07/15/2009
Pages: 4

UNITED STATES TAX COURT WASHINGTON, DC 2021 7 ALFREDO K . WONG & BELINDA CHEE , Petitioner s V . Docket No . 26526-08 S COMMISSIONER OF INTERNAL REVENUE, Respondent O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Michael B . Thornton at San Francisco, California, on June 25, 2009, containing his oral findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, an .appropriate decision will be entered . (Signed) Michael B . Thornton Judge Dated : Washington, D .C . July 15, 2009 SERVED JUL 16 2009 Bench Opinion by Judge Michael B . Thornton June 25, 200 9 2 Wong & Chee v . Commissioner Docket No . 26526-08 S 4 THE COURT : The Court has decided to render ora l 5 findings of fact and opinion in this case, and the following 6 represents the Court's oral findings of fact and opinion . 7 Except as otherwise provided by Rule 152(c) of the 8 Tax Court Rules of Practice & Procedure, the oral finding s 9 of fact and opinion shall not be relied upon as precedent . 10 This bench opinion is made pursuant to th e 11 authority granted by section 7459(b) and Rule 152 . Section 12 references are to the Internal Revenue Code in effect for 13 the taxable years at issue . All rule references are to the 14 Tax Court Rules of Practice & Procedure . 15 This case was tried on June 25th, 2009, in San 16 Francisco, California . Petitioners tried their case pro 17 sese . Scott W . Mentink represented Respondent . 18 Petitioners filed a form 1040, US individua l 19 income tax return, for 2006 . On the form 1040, Petitioners 20 reported a pension distribution of $72,781 to Alfredo K . 21 Wong, with tax withheld, $15259 . Petitioners did no 23 Chee, but had tax withheld of $15,742 . Petitioners also 24 failed to report a state income tax refund of $221 . 25 The parties have stipulated that the distribution t 22 report a retirement plan distribution of $78,719 to Belind a Heritage Reporting Corporatio n (202) 628-4888 5 1 of $78,719 and the tax refund of $221 is additional taxable 2 income for 2006 . 3 The sole remaining issue in this case is th e 4 applicability of the section 6662 ( a) accuracy - relate d 5 penalty . Section 6662 ( a) and ( b) .(1) and ( 2) imposes a 20 6 percent accuracy - related penalty on any portion of a tax 7 underpayment that is attributable to, among other things, 8 1) negligence or disregard of rules an d 9 regulations, o r 10 2) any substantial understatement of tax . 11 The section 6662 accuracy- related penalty i s 12 inapplicable to the extent the taxpayer has reasonable cause 13 and acted in good faith . Section 6664 ( c)(1) . 14 This determination is made considering al l 15 relevant facts and circumstances . Section 1 .6664-4 ( b)(1), 16 Income Tax Regs . 17 We are convinced that Petitione Cexercised 18 good faith . Whether Petitioners had reasonable caus e 19 presents a closer case . But taking into account the variety 20 of unusual circumstances that confronted Petitioners , 21 including Petitioner wife's ongoing mental health issue s 22 resulting from the untimely death of her 24-year-old sister 23 and Petitioner husband's own health problems , we find that 24 by the thinnest of margins , Petitioners have shown 25 reasonable cause . Heritage Reporting Corporation (202) 628-4888 1 Accordingly, Respondent's determination as to the 2 section 6662(a) penalty is not sustained . 3 To reflect the foregoing, an appropriate decision 4 will be entered . 5 This concludes the Court's findings of fact and 6 opinion in this case . 7 (Whereupon, at 11 :50 a .m .,the bench opinion in 8 the above-entitled matter was concluded . ) 9 10 11 1 2 13 14 15 16 17 18 19 20 . / / 2 1 2 2 23 24 25 Heritage Reporting Corporation (202) 628-4888