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In determining whether petitioners were negligent in the
preparation of their returns, we take into account petitioner Mr.
Dodge's legal and tax experience. Mr. Dodge prepared 75-100 farm
tax returns a year. Attorneys who specialize in taxation are
held to a higher standard of care. Tippin v. Commissioner, 104
T.C. 518, 534 (1995). Additionally, the size of the tax losses
claimed by petitioners in relation to the revenue earned from the
horse-breeding activity, combined with the substantial enjoyment
that petitioners derived from the activity, created a situation
that was "too good to be true" within the meaning of section
1.6662-3(b)(1)(ii), Income Tax Regs. Accordingly, petitioners
are liable for the section 6662(a) penalties.
To reflect the foregoing,
Decision will be entered
under Rule 155.
4(...continued)
substantial. As a result of our decision with respect to the
negligence penalty, we need not address this issue.
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