Gustashaw, Jr., et al v. Commissioner of IRS

Petitioner claimed substantial tax benefits from a tax shelter on four consecutive tax returns. The IRS later disallowed petitioner's claim and determined deficiencies in tax and accuracy-related penalties, including gross valuation misstatement penalties and a negligence penalty. Petitioner conceded the deficiencies in tax, but contested the penalties. The Tax Court affirmed the IRS's imposition of the penalties. The court held that the Tax Court correctly concluded that petitioner was liable for the 40% gross valuation misstatement penalties from 2000 through 2002. In addition, the court found no error in the Tax Court's determination that petitioner failed to establish that he acted with reasonable cause and in good faith with respect to his underpayment of tax. View "Gustashaw, Jr., et al v. Commissioner of IRS" on Justia Law