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made by petitioner for insurance were personal in nature and,
pursuant to section 262, not deductible.
E. Allowed Deductions
In the notice of deficiency, respondent allowed in full
deductions claimed for utilities, postal expenses, advertising,
office expenses, and trade dues. Petitioner now claims that he
understated the deductions reflected on his 1992 Schedule C with
respect to these items and is entitled to deductions in excess of
the amounts already allowed. Petitioners have not provided
sufficient evidence, documentary or otherwise, to establish that
petitioner incurred expenses in an amount greater than the amount
allowed by respondent.
III. Accuracy-Related Penalty
Respondent determined that petitioners were liable for the
accuracy-related penalty under section 6662(a). Section 6662(a)
and (b)(1) imposes a penalty on any portion of an underpayment
that is attributable to negligence or disregard of rules or
regulations. The term "negligence" includes any failure to make
a reasonable attempt to comply with the statue, and the term
"disregard" includes any careless, reckless, or intentional
disregard. Sec. 6662(c). The penalty does not apply to any
portion of an underpayment for which there was reasonable cause
and with respect to which the taxpayer acted in good faith. Sec.
6664(c).
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Last modified: May 25, 2011