- 26 -
to tax for negligence. See Lysek v. Commissioner, 583 F.2d 1088,
1094 (9th Cir. 1978), affg. T.C. Memo. 1975-293; Crocker v.
Commissioner, supra at 917. Failure to maintain adequate records
also indicates disregard of the rules or regulations that require
a taxpayer to keep permanent records sufficient to establish,
inter alia, the taxpayer's gross income and deductions. See
Crocker v. Commissioner, supra at 917.
We have found that petitioner failed to keep or maintain
adequate records. We conclude that petitioner is liable for an
addition to tax due to negligence pursuant to section 6653(a)(1)
for 1988, and for the accuracy-related penalty pursuant to
section 6662(a) for 1989 and 1990 for the part of the
underpayments that we have not found to be attributable to
fraud.10
Statute of Limitations for 1989
Petitioner argues that the deficiency and penalty for 1989
are barred by the statute of limitations because respondent has
not proven that petitioner's actions were fraudulent.
In the case of a false or fraudulent return with the intent
to evade tax, the tax may be assessed at any time. Sec.
10 We note that petitioner concedes that he is liable for
the addition to tax for negligence for 1988 and the accuracy-
related penalty for 1990 regarding Schedule C items in the
amounts of $35,422 and $47,109, respectively. We also note that
petitioner did not argue on brief that he is not liable for the
addition to tax for negligence and the accuracy-related penalty
regarding his "real estate COGS".
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