055 Failure to File Tax Returns

(Rescinded May 30, 2004) AUTHORITY: section 143.961, RSMo 1986. Regulation 1.741 was originally filed Dec. 22, 1975, effective Jan. 2, 1976. Amended: Filed Sept. 1, 1993, effective April 9, 1994. Rescinded: Filed Nov. 7, 2003, effective May 30, 2004. United States v. Boyle, 105 S. Ct. 687 (1985). The issue in this case was whether the taxpayer had proved reasonable cause for the late filing of a federal estate tax return under Internal Revenue Code 6651(a)(1). The language in this section is very similar to the language contained in section 143.741, RSMo and other Missouri revenue penalty statutes. To show reasonable cause, the Supreme Court said the taxpayer must “demonstrate that he exercised ‘ordinary business care and prudence’ but nevertheless was ‘unable to file the return within the prescribed time;” Estate of Clifford Bockelman v. Director of Revenue, Case No. RV-83-3510 (A.H.C. 5/14/86). The personal representative’s attorney had told her that they did not need to worry about the Missouri estate tax return until such time as all federal estate tax matters had been completed. The Administrative Hearing Commission determined that the personal representative had exercised ordinary business care and prudence and thus the failure to file Missouri estate tax return in a timely fashion was due to reasonable cause and not willful neglect. Estate of Orpha T. Neusteter v. Director of Revenue, Case No. RV-86-2063 (A.H.C. 11/6/87). The personal representative had not established the daily volume of mail handled by his office nor a record of timely filings over a period of time. These facts, the commission stated, were essential. In addition, the commission noted that the personal representative had nine months to file and the taxpayer in Armco had fifteen days. Based on this, the personal representative did not establish that his failure to file was due to reasonable cause and not willful neglect. Therefore, the additions were properly imposed by the department.