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Johnsons' and petitioners' choice to mix personal and business
records, and their failure or inability to properly show the
division is of their own making and was clearly negligent.
Stovall v. Commissioner, 762 F.2d 891, 895 (11th Cir. 1985),
affg. T.C. Memo. 1983-450; Crocker v. Commissioner, 92 T.C.
899, 917 (1989).
Further, petitioners claimed, up until the eve of trial,
amounts which had been conceded in prior proceedings. Claiming
hundreds of thousands of dollars in net operating loss
deductions, when those matters had been finally settled in
earlier years' litigation, cannot be considered reasonable or
what an ordinarily prudent person would do. Although
petitioners' returns were prepared by accountants, the Johnsons
made all judgments regarding personal or business decisions,
and they labeled various amounts for inclusion in the corporate
returns. We also note that Mr. Johnson has an associate's
degree in tax and accounting.
Under these circumstances, petitioners have failed to show
that respondent's determination was in error; hence, we find
that petitioners are liable for additions to tax under section
6653(a)(1) and (2).
Respondent determined that petitioners are liable for an
addition to tax under section 6661 for all taxable years in
dispute. Section 6661(a) provides for an addition to tax in
the amount of 25 percent of any underpayment attributable to a
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