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Commissioner, 925 F.2d 348, 353 (9th Cir. 1991), affg. 92 T.C. 1
(1989).
In the present case, petitioner claimed large net operating
losses of the Corporation that eliminated his tax liability in
both 1990 and 1991. Petitioner acknowledges, however, that he
was not entitled to deduct the losses of the Corporation, because
the Corporation had not filed a valid subchapter S election. In
claiming the Corporation's losses as deductions on his individual
income tax returns, petitioner was negligent in failing to follow
the provisions of the Internal Revenue Code.
Therefore, we conclude that petitioner is liable for
accuracy-related penalties pursuant to section 6662(a).
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011