- 6 -
We agree with respondent as to both items. In 1990 and
1991, petitioner practiced law as a sole proprietor. Earnings
from petitioner’s law practice therefore constituted earnings
from self-employment, and any contributions into petitioner’s
pension plan would not be deductible on Schedule C of
petitioners' joint Federal income tax returns. No authority
exists for claiming the partnership loss for 1991 on Schedule C
of petitioners’ 1991 joint Federal income tax return.
Negligence includes the failure to make a reasonable attempt
to comply with provisions of the Code and regulations or the
failure to exercise ordinary and reasonable care in preparation
and filing of a Federal income tax return. Sec. 6662(c).
Negligence has been defined as the failure to do what a
reasonable and ordinarily prudent person would do under the
circumstances. Emmons v. Commissioner, 92 T.C. 342, 349 (1989),
affd. 898 F.2d 50 (5th Cir. 1990); Neely v. Commissioner, 85 T.C.
934, 947 (1985).
Petitioners have offered no credible evidence that there was
a reasonable cause for erroneously claiming the deductions in
issue. Sec. 6664(c)(1). Petitioners are liable for the
negligence penalties.
To reflect the foregoing,
Decision will be entered
for respondent.
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011