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Petitioners have failed to satisfy any of the requirements of
section 280A; specifically, they have failed to show that any
portion of their residence was used exclusively for business.
Moreover, because their alleged business had no income, they
cannot deduct any of the costs of maintaining their home.
With respect to the employee business expenses claimed on
Schedule A for 1992, petitioners presented neither explanation
nor substantiation. The amounts claimed are again inherently
unreasonable. Further, it appears that some of the items claimed
on Schedule A were duplicated on Schedule C. Petitioners claimed
on Schedules A and C for 1992 total meals and entertainment
expenses of $10,800, which is approximately 15 percent of their
total reported income for that year. Petitioners in 1992 claimed
vehicle expenses relating to alleged business use of two cars,
for a total of $5,420, but they did not provide any evidence of
how the cars were used either in Mr. Huang’s employment or in
petitioners’ telecommunications business.
Section 6662(a) provides, among other things, for a penalty
equal to 20 percent of the portion of an underpayment
attributable to negligence. Negligence is defined in section
6662(c) as follows:
(c) Negligence.--For purposes of this section, the
term “negligence” includes any failure to make a
reasonable attempt to comply with the provisions of
this title, and the term “disregard” includes any
careless, reckless, or intentional disregard.
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Last modified: May 25, 2011