Yousef Rouzmehr - Page 4

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          least three knowledgeable people, two of whom were C.P.A.'s and one of whom 
          was a former Internal Revenue Service (IRS) agent.  Petitioner claims that  
          each of these individuals told him to lie about certain aspects of his return.
          For instance, at trial he claimed, contrary to the stipulation of settled   
          issues, that the funds he expended in gambling were not receipts from his   
          business but an inheritance from his father.  This was the first time       
          petitioner had raised this claim, and we held him to his stipulation, which he
          had agreed to while represented by a C.P.A. and with full knowledge and     
          acquiescence.  Rule 91(e) provides:                                         
               A stipulation shall be treated, to the extent                          
               of its terms, as a conclusive admission by the parties to the          
               stipulation * * *.  The Court will not permit a party to a             
               stipulation to qualify, change, or contradict a stipulation in         
               whole or in part, except that it may do so where justice requires.     
               * * *                                                                  
          To allow petitioner at this late date to contradict his stipulation, without
          any warning or advance notice to respondent or to the Court, would be highly
          prejudicial to respondent, and we exercise our discretion to hold petitioner
          to his stipulation.                                                         
               Petitioner also claimed that he questioned his return preparer about   
          showing a loss from his Schedule C business, because he knew at the time he 
          filed his petition that the business had made money.  However, he signed the
          return as it was because, according to him, the preparer told him the IRS   
          would not audit the return.                                                 
               Section 6662(a) imposes a 20-percent addition on the amount of         
          underpayment due to negligence or disregard of rules and regulations.       
          "Negligence" includes any failure to make a reasonable attempt to comply with
          the provisions of the internal revenue laws or to exercise ordinary and     
          reasonable care in the preparation of a tax return.  Sec. 1.6662-3(b), Income
          Tax Regs.  Negligence also includes any failure by the taxpayer to keep     
          adequate books and records or to substantiate items properly. Marcello v.   
          Commissioner, 380 F.2d 499 (5th Cir. 1967), affg. in part and remanding in  






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