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and 1990. Petitioner's failure in numerous respects to comply
with the requirements for maintaining adequate records itself
warrants the negligence penalty. Yee v. Commissioner, T.C. Memo.
1985-379, affd. without published opinion 822 F.2d 62 (9th Cir.
1987). Among other things, petitioner destroyed books and
records needed to prove its net operating losses, failed to
maintain records necessary to substantiate its deductions, and
intermingled the nondeductible mileage of one car with the
deductible mileage of another. Thus, we hold respondent
substantially justified in her position regarding the negligence
penalties.
(5) Lot 51 Services Income
The deficiency in income tax asserted by respondent in an
amendment to her answer revolved around services performed by Far
Western for a third party, International Marketing Limited (IML),
sometime in the mid-1980s. As payment, IML gave petitioner a
parcel of land known as Lot 51. Despite being accrual method
taxpayers, petitioner and its subsidiary failed to include in
income the amount due for services performed for IML. Petitioner
subsequently conceded $112,000 of services income for 1990. As a
result, the Court holds respondent substantially justified in her
position on this issue.
(6) Lot 51 Services Income Negligence Penalty
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