B. Albert and Betty M. Holowinski - Page 11

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               The determination of whether petitioners engaged in their              
          antique glassware sales activity for profit involves a difficult            
          factual question.  See, e.g., Cavalaris v. Commissioner, T.C.               
          Memo. 1996-308.   Petitioners substantiated all of the claimed              
          expenses and employed an accountant to prepare their tax returns            
          and advise them.  Nothing in the record suggests that their                 
          reliance on Mr. Myers was less than reasonable, particularly                
          considering petitioners' lack of prior business experience and              
          educational backgrounds.5  Accordingly, we find that petitioners            
          acted with reasonable cause and in good faith, and, therefore,              
          the penalties do not apply.                                                 
                                             Decision will be entered for             
                                        respondent with respect to the                
                                        deficiencies, and decision will               
                                        be entered for petitioners with               
                                        respect to the penalties under                
                                        section 6662(a).                              

          5   While Mr. Holowinski did obtain his undergraduate degree in             
          business administration, he did so many years prior to those in             
          issue.  His work experience did not focus on business or                    
          financial skills, and he does not appear to have any special                
          training in accounting or tax matters.                                      

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