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Mr. Speer did not keep a diary of the amount of time he
devoted to Gateway, Maximo, and Scheer during 1988, 1989, and
1990, nor did petitioners offer any records similar to those
described in the above regulation. Petitioners claim, however,
that Mr. Speer’s testimony about the various types of activities
he engaged in with respect to Gateway and Maximo and the
approximate number of hours he spent on these activities
constitutes a “narrative summary” sufficient to establish
material participation. Although the regulations are somewhat
inconclusive concerning the records needed to substantiate
material participation, we do not think that they contemplate
this type of postevent “ballpark guesstimate” that petitioners
used. Goshorn v. Commissioner, T.C. Memo. 1993-578. We,
therefore, find that petitioners have not met their burden of
proving that Mr. Speer materially participated in the activities
in question. Rule 142(a).
Additions to Tax
Respondent determined that petitioners were liable for an
addition to tax for negligence or intentional disregard of rules
or regulations pursuant to section 6653(a)(1) for 1988 and a
penalty for negligence pursuant to section 6662(a) for 1989 and
1990 with respect to petitioners’ failure to report constructive
dividend income during those taxable years. Respondent also
determined that petitioners were liable for the addition to tax
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