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Here, petitioner failed to maintain adequate records to
determine his correct tax liability for the 1991 taxable year. In
order to determine petitioner's correct tax liability, respondent
reasonably used petitioner's dog racing programs for the first
half of 1991 to reconstruct, through extrapolation, petitioner's
gambling winnings and losses for 1991. Accordingly, we hold that
petitioner has failed to substantiate the accuracy of his 1991
Federal income tax return and that his net gambling winnings are
taxable as determined by the Commissioner for the year in
question.
Negligence Penalty
Respondent determined that petitioner was negligent under
section 6662(a) in claiming a deduction for gambling losses for
the tax year 1990 and in failing to properly report his gambling
income for the tax year 1991. For purposes of section 6662(a),
the term "negligence" includes any failure to make a reasonable
attempt to comply with the provisions of the Internal Revenue
Code, and "disregard" includes any careless, reckless or
intentional disregard. Sec. 6662(c). Negligence frequently
takes the form of failure to report income or overstatement of
deductions. Marcello v. Commissioner, 380 F.2d 509 (5th Cir.
1967); Estate of Mason v. Commissioner, 64 T.C. 651 (1975), affd.
566 F.2d 2 (6th Cir. 1977); Beus v. Commissioner, 261 F.2d 176
(9th Cir. 1958). Understatement of income or overstatement of
deductions often reflects the inadequacy of the taxpayer's
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