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Immediately following petitioner's counsel's examination of the
witness, however, Oania confirmed during re-cross-examination
that he actually works with and shares compensation with
petitioner.
Q Mr. Oania, when you divide up the funds, the person
that you sit down with, or stand up with when you
divide up the funds is James C. Estrada?
A The person, yes.
On the basis of the record, we find that petitioner
performed services for NAA, and was compensated for performing
them. Since petitioner treated the money "paid" to the CRNA
Trust as his own, the total amount "paid" to the CRNA Trust
during the years in issue was includable in petitioner's gross
income.
2. Addition to Tax Under Section 6651(a)(1)
Respondent determined additions to tax under section 6651(a)
for petitioner's 1991 and 1992 taxable years. In order to avoid
this addition to tax, petitioner must prove that his failure to
file was: (1) Due to reasonable cause and (2) not due to willful
neglect. Sec. 6651(a); Rule 142(a); United States v. Boyle, 469
U.S. 241, 245 (1985); United States v. Nordbrock, 38 F.3d 440
(9th Cir. 1994). A failure to file a timely Federal income tax
return is due to reasonable cause if the taxpayer exercised
ordinary business care and prudence and, nevertheless, was unable
to file the return within the prescribed time. Sec. 301.6651-
1(c)(1), Proced. & Admin. Regs. Willful neglect means a
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