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assets were needed for an upcoming plant expansion. We recognize
that there is no constructive receipt where the payor lacks the
funds to make the payments. Estate of Noel v. Commissioner, 50
T.C. 702, 706-707 (1968). However, no evidence was presented
that Exacto was indebted to any creditors or was financially
impaired during the period in question. General statements
concerning future expansions are insufficient to justify not
applying the constructive receipt doctrine. Accordingly, there
was constructive receipt, and we find for respondent on this
issue.
Issue 4. Accuracy-Related Penalty: Mr. and Mrs. Heitz
Respondent determined that Mr. and Mrs. Heitz were liable
for penalties under section 6662(a) and (b)(1) for each of the
years in issue because they were negligent in failing to include
the interest income on their returns. We sustain respondent's
determination.
In determining whether Mr. and Mrs. Heitz were negligent in
the preparation of their returns, we take into account Mr. Heitz’
business experience. Wise v. Commissioner, T.C. Memo. 1997-135.
Mr. Heitz, a sophisticated taxpayer, manipulated the timing of
the interest payments in order to defer the recognition of
income. Accordingly, petitioners Mr. and Mrs. Heitz are liable
for the section 6662(a) penalties.
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