Maurice D. and Elinor Taylor - Page 30

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             not excuse the failure to report income from the                                                     
             grocery/convenience store business or any other item.  See Kenroy,                                   
             Inc. v. Commissioner, T.C. Memo. 1984-232.  The failure to keep                                      
             adequate records, in contravention of section 6001, supports the                                     
             imposition of the negligence addition to tax and the accuracy-                                       
             related penalty.  See Maguire v. Commissioner, T.C. Memo. 1996-145;                                  
             Tabbi v. Commissioner, T.C. Memo.  1995-463; Simonelli v.                                            
             Commissioner, T.C. Memo. 1985-12.                                                                    
                    Finally, petitioners made no efforts to obtain professional                                   
             advice to determine the tax consequences of the check-kiting scheme                                  
             before filing their tax returns.  They never asked either their                                      
             accountant or a tax attorney about how to report those activities.                                   
             Given their lack of knowledge of the tax law, petitioners should                                     
             have sought advice about the tax implications of the check-kiting                                    
             scheme.  Cf. Krause v. Commissioner, T.C. Memo. 1991-13.                                             
                    Thus, for 1988, we hold that petitioners are liable for                                       
             additions to tax for negligence or disregard of rules or                                             
             regulations pursuant to section 6653(a)(1), substantial                                              
             understatement of tax pursuant to section 6661(a)(1), and failure                                    
             to timely file their return.  For 1989 and 1990, we hold that                                        
             petitioners are liable for the accuracy-related penalties for                                        
             negligence or disregard of rules or regulations pursuant to section                                  
             6662.                                                                                                







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