- 19 -
Petitioner has failed to meet his burden of persuasion with
respect to the accuracy-related penalties. Petitioner claimed
substantial deductions for which he apparently maintained no
records. At trial, petitioner admitted that some of the
deductions on his Schedules C for 2001 and 2002 may have
represented personal expenditures, including the costs of a
family trip to Mexico and payments for insurance premiums on his
personal automobiles. As noted supra, petitioner likely incurred
several business expenditures during 2001 and 2002. However,
petitioner has not produced any evidence establishing that he
acted with reasonable cause and in good faith with respect to any
portion of the understatements of tax on his 2001 and 2002 income
tax returns. Therefore, to the extent that we uphold
respondent’s determination of deficiencies for 2001 and 2002, we
conclude that petitioner is liable for the section 6662(a)
penalties.
To reflect the foregoing,
Decision will be entered
under Rule 155.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Last modified: November 10, 2007