Opinion ID: 276638
Heading Depth: 1
Heading Rank: 3

Heading: The Section 6651(a) Penalty Assessed Against Carlos and Jacqueline Marcello.

Text: 12 Carlos and Jacqueline Marcello filed their 1959 joint tax return late, thereby incurring a penalty pursuant to Section 6651(a) of the 1954 Internal Revenue Code. That section provides for a 5% penalty of the tax owed for each month or fraction thereof that the return is filed late. The Commissioner determined that the return was one month and three days late, so that the penalty is 10%. The taxpayers contend that the return was less than one month late, so that the penalty should be 5%. We agree with the Commissioner that the procrastination cost the taxpayers a two-month penalty. 13 As a result of a properly granted extension, Carlos and Jacqueline had until September 15, 1960, to file their 1959 joint return. They desired even more time to prepare their return. In a letter dated September 23, 1960, their local district director refused the request for a further extension, but did advise the taxpayers that the return would be considered timely filed if it were received by his office within ten days of the date of the letter. The return was not filed until October 18, 1960, one month and three days after the September 15 filing date. 14 The taxpayers contend that the ten-day grace period extended their filing date to October 3. They assume that the district director's letter was an extension of time for filing a return within the meaning of Section 6081(a). Their assumption is wrong. The director expressly refused to grant an extension beyond September 15. Exercising his discretion, he, in effect, said that he would not invoke the sanctions of § 6651(a) if the return was filed within ten days. The taxpayers, though not adhering to the conditions of that offer, still wish to reap its benefits. This we do not permit. The logical extension of the taxpayers' argument leads to an unacceptable result. Under their theory, the filing became overdue as of October 3. They thereby would obtain an eighteen-day extension. 11 Surely the district director did not intend or contemplate such a result. We find no such extension to be warranted by the facts. In short, the taxpayers have not shown that their failure to file was due to reasonable cause. 12 15