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liable for the addition, unless they can show that the delay was
due to reasonable cause. Petitioners’ only explanation is that
they expected to receive a refund, and thus thought there would
be no penalty. The expectation of receiving a refund is not
reasonable cause to fail to do what the law requires, and the law
does not provide for any such exception. Petitioners are liable
for the addition to tax under section 6651.
Respondent also determined a penalty for negligence for each
of the years in issue. Section 6662 applies a penalty of 20
percent of the portion of any underpayment which is attributable
to negligence or disregard of rules or regulations. Sec.
6662(b)(1). The term “negligence” includes any failure to make a
reasonable attempt to comply with the provisions of the income
tax laws, and the term “disregard” includes any careless,
reckless, or intentional disregard. Petitioner did not seek
advice from either the respondent or any tax professional about
the propriety of deducting his lost anticipatory wages as an NOL,
an issue that is well settled. Neither did he seek advice about
treating his personal residence as a Schedule C expense for a
business that was, at most, in the startup phase. We believe a
reasonable person would have sought advice before taking the
positions taken by petitioners on their return. Petitioners have
the burden of proof on this issue. Inasmuch as petitioners
conceded the remaining adjustments raised in the notice of
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