Holden C. Gutermuth - Page 9

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               Petitioner has practiced law for many years and was aware of           
          the requirement that complete and accurate books and records be             
          maintained with respect to the financial activities of NTG.                 
          Petitioner did not present any evidence nor did he make any                 
          argument as to why the penalty for negligence should not apply to           
          the disallowed $35,000 partnership loss deduction.  Although                
          neither petitioner nor respondent made any specific argument as             
          to whether the penalty for negligence should apply to the other             
          adjustments that have been agreed upon, those other adjustments             
          were settled largely in a manner favorable to petitioner.  We               
          conclude that petitioner is liable for the penalty for negligence           
          only with respect to the portion of the income tax deficiency               
          attributable to the claimed $35,000 NTG partnership loss.                   

                                                  Decision will be entered            
                                             under Rule 155.                          




















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