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6664(c); sec. 1.6664-4(a), Income Tax Regs. The Commissioner’s
determination imposing the accuracy-related penalty is presumed
correct, and the taxpayers bear the burden of proving that they
are not liable. Rule 142(a); Tweeddale v. Commissioner, 92 T.C.
501, 505 (1989).
Petitioner’s only contention raised as a defense to the
accuracy-related penalty is his reliance on respondent’s
Publication 334, entitled "Tax Guide for Small Business".
Petitioner indicated that the following two paragraphs on page
11, of the 1993 tax year version, support his deduction and
establish that his method of accounting for that deduction
clearly reflects income:
Business and personal items. You may account for business
and personal items under different accounting methods.
Thus, you may figure the income from your business under an
accrual method even though you use the cash method to figure
personal items.
Two or more businesses. If you operate more than one
business, you generally may use a different accounting
method for each separate and distinct business if the method
you use for each clearly shows your income. For example, if
you operate a personal service business and a manufacturing
business, you may use the cash method for the personal
service business but you must use the accrual method for the
manufacturing business. [Emphasis added.]
Petitioner’s reliance on the above passages does not
establish reasonable cause to support his position. Petitioner
misunderstands these paragraphs and incorrectly applied them to
his factual situation. For example, the second paragraph
comports with code section 446(d) in stating, generally, that a
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