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which the disclosure on a taxpayer's return of a position with
respect to an item is adequate disclosure for purposes of
reducing the understatement of income tax under section 6662.
The expenses claimed by petitioners are not within the safe
harbor provided by the revenue procedures. If the revenue
procedure does not include an item, disclosure is adequate with
respect to that item only if made on a properly completed Form
8275 or 8275-R, as appropriate, attached to the return for the
year. Sec. 1.6662-4(f)(2), (5), Income Tax Regs. Petitioners
did not attach either form to their returns. Therefore, listing
the expenses related to the apple orchard activity on the tax
returns does not, by virtue of the revenue procedures, constitute
adequate disclosure under section 6662(d)(2)(B).
On their returns, petitioner reported his occupation as
"Farmer/Dental Nutrition", and Mrs. Zdun reported her occupation
as "Farmer/Nutrition Expert". Petitioners transferred the income
from the dentistry activity from Schedule C (Profit or Loss From
Business) to Schedule F (Profit or Loss From Farming), which was
attached to Form 1065 (U.S. Partnership Return of Income), and
then back to Form 1040. We note that petitioners' method of
reporting dental practice income grossed up the farm income,
providing the apple orchard activity with the appearance of a
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