Robert P. and Christine M. Lolli - Page 6

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          for the taxable year 1991.  Rule 142(a).  Based upon the                    
          testimony elicited from petitioner at trial, we find that                   
          respondent has met her burden of demonstrating that the $3,000              
          business loss deduction claimed for 1991 on the "Horizon America"           
          Schedule C was duplicative of the business loss deduction claimed           
          for 1990.  Respondent's determination of an increased deficiency            
          is therefore sustained.                                                     
               Refund and interest                                                    
               Petitioners failed to produce any evidence to refute                   
          respondent's determination that petitioner received taxable                 
          interest income in the amount of $369 and a $184 taxable refund             
          from the State of Arizona during the taxable year 1991.                     
          Accordingly, respondent is sustained on these issues.                       
               Section 6662 penalty                                                   
               Respondent determined an accuracy-related penalty under                
          section 6662(a) with respect to petitioners' 1990 Federal income            
          tax return for negligence or disregard of rules or regulations.             
               In pertinent part, section 6662 imposes an accuracy-related            
          penalty equal to 20 percent of the portion of an underpayment of            
          tax that is attributable to negligence or disregard of rules or             
          regulations.  Sec. 6662(a), (c).  Section 6662(c) defines                   
          "negligence" as including any failure to make a reasonable                  
          attempt to comply with the provisions of the Internal Revenue               
          Code, and defines "disregard" as including any careless,                    
          reckless, or intentional disregard.                                         





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