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We also reject petitioner's second argument that
respondent's failure to "object" to petitioner's treatment
of losses from the Cloudia during prior audit examinations
proves that there was no negligence. Petitioner testified
that the first audit during which this issue was raised
was the audit that led to the subject notice of deficiency.
Based upon these facts, we cannot draw the "inference"
offered by petitioner that "the position adopted by
Petitioner was not undertaken without due regard for the
rules and regulations and was adequately disclosed."
In this case, there is ample evidence of negligence.
Petitioner kept no regular records or logs of his
activities with respect to the Cloudia, he commingled
funds from his business and personal activities, and he
claimed the subject deductions despite the fact that he
had no actual and honest objective of making a profit.
Further, petitioner concedes the omission of $19,125 of
income from his legal practice. Petitioner has offered no
evidence to rebut respondent’s determination of negligence.
Accordingly, we find that petitioner has not met his
burden, and we sustain respondent’s determination of the
section 6662 penalty.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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