- 3 -
extent set out below. (4) Whether the farm activity conducted by
petitioners was an activity engaged in for profit for the taxable
years 1991 and 1992 under section 183. We hold it was not. (5)
Whether petitioners are liable for penalties for negligence or
intentional disregard of rules or regulations for the taxable
years 1991 and 1992 under section 6662(a). We hold they are.3
FINDINGS OF FACT
A few of the facts have been stipulated and are so found.4
The stipulated facts and the accompanying exhibits are
incorporated into our findings by this reference. At the time
the petition in this case was filed, petitioners, husband and
wife, resided in Livermore, California. The term "petitioner"
refers to Barry D. Whalley.
Petitioners timely filed joint Federal income tax returns,
Forms 1040, for 1991 and 1992. Those returns reflected wages
paid by the City of Hayward Police Department to Lieutenant
Suzanne B. Whalley (Mrs. Whalley), in the amounts of $70,198 for
3 Respondent determined, and we agree, that for 1991 and 1992,
certain computational adjustments should be made, which would:
(1) Increase petitioners' self-employment tax liability and self-
employment tax deduction,(2) reduce petitioners' itemized
deductions, and (3) preclude petitioners from claiming the Earned
Income Credit. These are mathematical adjustments that the
parties can make in their Rule 155 computation.
4 The pretrial order required the parties to stipulate all
facts and documents to the extent possible. Nevertheless,
petitioners wasted the Court's time, effort, and resources
introducing more than 65 exhibits into evidence, many of which
could and should have been stipulated.
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