Opinion ID: 804193
Heading Depth: 4
Heading Rank: 3

Heading: Additional Penalties

Text: We also conclude that the Tax Court properly sustained the additions to tax. An addition to tax shall be added if a taxpayer fails to file a timely tax return without 8 reasonable cause. § 6651(a)(1); see also Calloway v. Comm’r, 135 T.C. 26, 45 (2010). The Robinsons do not dispute that they filed their returns late. They claim that their delay was due to reasonable cause because they were waiting for the Tax Court to rule on a prior dispute. However, as the Tax Court pointed out, the decision in the prior case was entered in November 2004. The Robinsons’ 2004 and 2005 returns were due in April 2005 and April 2006, respectively. They did not file either until late 2007. Accordingly, their argument is unpersuasive. Likewise, the Tax Court properly sustained the accuracy-related penalties. Section 6662(a) imposes a twenty percent tax on the portion of an underpayment attributable to, inter alia, a “substantial understatement of income tax.” § 6662(a) and (b). A substantial understatement is an amount exceeding the greater of ten percent of the tax required to be shown on the return or $5,000. § 6662(d)(1)(A). The amount by which the Robinsons underestimated their tax liability exceeded both ten percent of the tax required and $5,000. Finally, the Robinsons’ argument that this Court should bar enforcement of the deficiency as a matter of fairness is not persuasive.