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zeroed out their income tax liabilities, Marrin v. Commissioner,
supra; Cohen v. Commissioner, T.C. Memo. 1996-546. See generally
Raby & Raby, "Ordinary Deductions, but Capital Losses for
Securities Traders", Tax Notes 611 (Feb. 3, 1997), discussing
these and other recent cases in this area.
Petitioner also argues that the Opinion is internally
inconsistent. Petitioner asserts that, in finding that Mr. Kelly
did not act with fraudulent intent, the Court has relied upon Mr.
Kelly's representation to his accountant that he was licensed to
do business as an options dealer, a representation which the
Court rejects as false, but to which it holds petitioner since,
on brief, she did not contest its accuracy. Petitioner goes on
to claim that in sustaining the additions to tax under section
6653(a), the Court applied a contrary analysis, rejecting Mr.
Kelly's claim of reliance upon his accountant because the Court
found that he had not shown that he provided his accountant with
complete and accurate information.
The Court has not rejected as false Mr. Kelly's
representation to his accountant that he was licensed to do
business as an options dealer. The Court stated: "Considering
the importance of this allegation to Mr. Kelly's theory of the
case, one would have expected him to present evidence verifying
its accuracy. He did not."
The Court found, as one of the weaknesses to petitioner's
argument that the option losses were grossly erroneous, that Mr.
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