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has not met his burden of proving that he was engaged in a bona
fide business during 1991 other than his employment and sustain
respondent's disallowance of petitioner's claimed business
expenses relating to A & M Techservices.
Respondent allowed some of the Schedule C business expense
deductions claimed by petitioner relating to A & M Techservices
for the year 1992. According to petitioner, this business was a
"personal & financial services/collection agency". At trial,
petitioner failed to offer proof of any amount of deductions in
excess of those allowed by respondent. Accordingly, we sustain
respondent's determinations with regard to petitioner's claimed
Schedule C deductible expenses for the year 1992.
Section 6662(a) imposes an accuracy-related penalty of 20
percent on any portion of an underpayment of tax that is
attributable to items set forth in section 6662(b). Respondent
contends that petitioner is liable for this penalty for either
negligence or substantial understatement of tax under section
6662(b)(1) and (2).
Negligence includes any careless, reckless, or intentional
disregard of rules or regulations, any failure to make a
reasonable attempt to comply with the provisions of the law, and
any failure to exercise ordinary and reasonable care in the
preparation of a tax return. See Zmuda v. Commissioner, 731 F.2d
1417, 1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982).
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