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any failure to make a reasonable attempt to comply with the
provisions of the Internal Revenue Code. Sec. 6662(c).
Petitioners must prove that they were not negligent. Allen v.
Commissioner, 925 F.2d 348, 353 (9th Cir. 1991), affg. in part
and revg. in part 92 T.C. 1 (1989); Betson v. Commissioner, 802
F.2d 365, 372 (9th Cir. 1986), affg. T.C. Memo. 1984-264.
Petitioners contend that they were not negligent because
they prepared their tax returns in good faith and to the best of
their ability. Respondent argues that petitioners are negligent
because they lost many of their records and did not take
reasonable steps to reconstruct them. See Lewis v. Commissioner,
T.C. Memo. 1983-741. In Lewis, we concluded not only that the
taxpayer lost records of travel and entertainment expenses, but
also that some of the records may never have existed. We also
pointed out that the taxpayer in Lewis deducted some automobile
expenses which he said at trial related to personal use of his
car. We conclude that this case is distinguishable from Lewis
and that petitioners have shown that they were not negligent in
the preparation of their 1990 and 1991 tax returns.
To reflect the foregoing and concessions,
Decision will be entered
under Rule 155.
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