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deductions. Mr. Beltran disregarded the documentary evidence
petitioners presented to him and, instead, listed unrealistic
amounts as deductions on the returns. The Court is further
satisfied that petitioners knew they were required under the law
to substantiate deductions claimed on their returns. The
reservations they expressed to Mr. Beltran and the answers he
gave them should have prompted them to look beyond and ascertain
the accuracy of his representations. Petitioners, therefore,
made no effort to assess their tax liability correctly. On this
record, the Court sustains respondent on the section 6662(a)
accuracy-related penalties for the years in question.
Section 6673(a) authorizes the Court to require a taxpayer
to pay to the United States a penalty not exceeding $25,000 when,
in the Court's judgment, proceedings have been instituted or
maintained by the taxpayer primarily for delay or where the
taxpayer's position in the proceeding is frivolous or groundless.
The Court considers petitioners' claim that they should not be
liable for the deficiencies and penalties to be frivolous and
groundless. Petitioners knew, or should have known, that a
substantial portion of the itemized deductions at issue was false
and could not be sustained. Petitioners knew that they could
deduct only amounts that they had actually paid. They made no
attempt to determine the qualifications of their return preparer
and, moreover, did not seek other professional advice to satisfy
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