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for 1989, reporting the loss that was the principal issue in this
case, and claimed a refund of $5,420. Although petitioners have
conceded several adjustments that would increase their taxable
income, the total of these adjustments is far less than the
$70,379 loss realized by them in the foreclosure sale of their
property. The amended return was filed within the limitation
provision of section 6512(b)(3)(C), prior to issuance of the
notice of deficiency. Petitioners, therefore, overpaid their
taxes for 1989 and, therefore, are entitled to a credit or refund
resulting from this overpayment. The amount of the credit or
refund will be calculated under Rule 155.
The third issue is whether petitioners are liable for the
addition to tax under section 6651(a)(1) for their failure to
file timely their 1989 Federal income tax return. Petitioners'
1989 return was date stamped as having been received by the
Internal Revenue Service (IRS) Center at Ogden, Utah, on
October 30, 1990. Attached to the return is IRS Form 2688,
Application for Additional Extension of Time to File, wherein
petitioners requested an extension of time until October 15,
1990, to file their return. This extension was approved. As
stated above, however, petitioners did not file their return
until October 30, 1990. Therefore, their return was delinquent.
The addition to tax under section 6651(a)(1) is imposed
where there is failure to timely file a tax return, unless it is
shown that the failure to timely file is due to reasonable cause
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