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for those purposes. Petitioner paid expenses not associated with
the activity, such as her insurance premiums, from the account.
Petitioner had no business records for the activity. Petitioner
had no expertise in providing tours, nor did she have any special
knowledge of Haiti. Petitioner did not devote much of her time
to Too Close To Home. She worked 80 hours a week in her jobs and
carried on Too Close to Home during lunch and between jobs.
Petitioner did not carry on Too Close To Home for profit during
the year in issue. Therefore, her deductions are limited to the
income derived from the activity, which was zero. Petitioner
offered no evidence to support a deduction for State and local
income taxes. Therefore, she is not entitled to a deduction.
Respondent determined an addition to tax as a result of
petitioner's failure to file a timely return. Section 6651(a)(1)
imposes an addition to tax for failure to file a timely tax
return. The addition to tax is equal to 5 percent of the amount
of the tax required to be shown on the return if the failure to
file is not more than 1 month. Sec. 6651(a)(1). An additional 5
percent is imposed for each month or fraction thereof in which
the failure to file continues, to a maximum of 25 percent of the
tax. Id. The addition to tax is applicable unless petitioner
establishes that the failure to file was due to reasonable cause
and not willful neglect. Id.
Petitioner's 1989 return was received by respondent on
September 1, 1995. Petitioner offered no testimony or evidence
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