Raymond Verni Schroeder - Page 11

               Petitioner had not established that the payment to the                 
          Neptune Society was made for any purpose other than to bury his             
          sister-in-law in accordance with her religious beliefs.  These              
          costs were personal expenses and are not deductible.  Sec. 262.             
          Respondent is sustained on this issue.                                      
               Petitioner's trial memorandum lists payments claimed as                
          other miscellaneous deductions.  Petitioner presented no evidence           
          as to the purpose for these expenditures.  Therefore, petitioner            
          has failed to establish that he is entitled to a deduction for              
          any other miscellaneous expenses.  Respondent is sustained on               
          this issue.                                                                 
          Accuracy-Related Penalty                                                    
               Section 6662(a) imposes an accuracy-related penalty equal to           
          20 percent of the portion of any underpayment of tax that is due            
          to negligence.  Sec. 6662(a) and (b)(1).  The term "negligence"             
          includes any failure to make a reasonable attempt to comply with            
          the provisions of the Internal Revenue Code.  Sec. 6662(c).                 
               No penalty will be imposed under section 6662(a) with                  
          respect to any portion of an underpayment if it is shown that in            
          regard to such portion there was reasonable cause and that the              
          taxpayer acted in good faith.  Sec. 6664(c)(1); sec. 1.6664-4(a),           
          Income Tax Regs.  This determination is based on all of the facts           
          and circumstances.  Sec. 1.6664-4(b)(1), Income Tax Regs.                   

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