Ronnie F. Judy - Page 2

                                                - 2 -                                                 

                  Year              Deficiency              Sec. 6662                                 
                  1989              $6,313                  $1,263                                    
                  1990              17,439                  3,488                                     
                  After concessions by both parties, the issues for decision                          
            are:  (1) Whether petitioner failed to report income for 1989 and                         
            1990 in the amounts of $7,439 and $36,663, respectively; and (2)                          
            whether petitioner is liable for negligence penalties under                               
            section 6662(a).  We hold for respondent on both issues.                                  
                                         FINDINGS OF FACT                                             
                  Some of the facts have been stipulated and are so found.                            
            The stipulations of fact and attached exhibits are incorporated                           
            by this reference.  At the time the petition was filed,                                   
            petitioner’s legal residence was in Reevesville, South Carolina.                          
            During the years at issue petitioner operated a farm.  The                                
            primary sources of petitioner’s income were sales of cattle,                              
            soybeans and grain.  Petitioner maintained a single bank account                          
            at the First Federal Savings & Loan of Walterboro for both                                
            personal and business use.  He did not deposit all farm receipts                          
            into this bank account.  He endorsed to third-party creditors                             
            some of the checks he received.  Petitioner concedes that he                              
            failed to maintain adequate books and records to account for his                          
            farming activities during the years at issue.  He further                                 
            concedes that his Federal income tax returns for these years did                          

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