10
Petitioner argues that his failure to achieve success in the
brokerage business should not preclude a determination that he is
engaged in such activity for profit. He insists that he has a
good faith profit motive and that the Internal Revenue Service
and this Court should not be permitted to decide otherwise since
we allegedly lack any brokerage experience. It is well settled
that we are not required to accept self-serving testimony in the
absence of corroborating evidence. Lerch v. Commissioner, 877
F.2d 624, 631-632 (7th Cir. 1989), affg. T.C. Memo. 1987-295;
Niedringhaus v. Commissioner, 99 T.C. 202, 212 (1992). Based on
the foregoing, we conclude that petitioner was not engaged in a
brokerage business for profit, and, accordingly, having received
no income from that source, is not entitled to claim a deduction
for any expenses related thereto during the years at issue.
We next consider whether petitioner is liable for an
addition to tax for negligence under section 6653(a)(1) for 1988
and an accuracy-related penalty under section 6662 for 1989.
Section 6653(a)(1) imposes an addition to tax equal to 5 percent
of the underpayment if any part of an underpayment of tax was due
to negligence or intentional disregard of rules or regulations.
Negligence is defined by section 6653(a)(3) as the failure to
exercise the due care of a reasonable and ordinarily prudent
person under similar circumstances. Neely v. Commissioner, 85
T.C. 934, 947 (1985). Under section 6662, there shall be added
to the tax an amount equal to 20 percent of the portion of the
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