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in the silver market. The record also shows that Mr. Crowl would
share the profits in the event that the investment proved
profitable. Thus, it appears to us that petitioner and Mr. Crowl
transacted business for the purposes of investing in the silver
market and that no debtor-creditor relationship existed between
them. Nor has petitioner established that any debt owed him by
Mr. Crowl became worthless during the year in issue. We find for
respondent on this issue.
4. Delinquency Penalty
Respondent determined that petitioner is liable for an
addition to tax under section 6651(a)(1). Respondent determined
that petitioner failed to file timely his 1987 Federal income tax
return, and that he failed to show that his delinquency was due
to reasonable cause.
Section 6651(a)(1) imposes an addition to tax for failure to
file a tax return on time. The addition to tax imposed under
section 6651(a)(1) does not apply if petitioner can prove that
his failure to file was: (1) Due to reasonable cause, and
(2) not due to willful neglect. Sec. 6651(a); United States v.
Boyle, 469 U.S. 241, 245 (1985); In re Stanford, 979 F.2d 1511,
1512 (11th Cir. 1992). A failure to file timely a Federal income
tax return is due to reasonable cause if the taxpayer exercised
ordinary business care and prudence, and nevertheless, was unable
to file the return within the prescribed time. In re Stanford,
supra at 1514; sec. 301.6651-1(c)(1), Proced. & Admin. Regs.
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