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accurate records to show the purpose of the payment for
attorneys' fees in order to allocate properly the fees between
the insurance suit and the embezzlement suit. Because petitioner
failed to do so, we are not persuaded that he made a reasonable
attempt to comply with the regulations, and petitioners have not
shown reasonable cause for such failure. Secs. 1.6664-4(b)(1),
1.6662-(3)(b)(1), Income Tax Regs. Accordingly, we conclude that
the portion of petitioners' underpayment relating to the
disallowed amount of the deduction of attorneys' fees is
attributable to negligence.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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