Terry F. and Carol J. Zdun - Page 26

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          profit-making activity.7  Reporting income actually earned as a             
          dentist as income earned from an apple orchard is                           
          misrepresentation, not disclosure.                                          
               We conclude that petitioners have failed to provide adequate           
          disclosure for purposes of section 6662(d)(2)(B), and we find               
          that petitioners are liable for the accuracy-related penalty for            
          each of the years at issue.                                                 
                                                  Decision will be entered            
                                             under Rule 155.                          






















               7  For example, in 1993 the apple orchard activity generated           
          actual sales of less than $1,700, yet petitioners reported net              
          farm profit of $14,048 by including petitioner's $68,400 of                 
          dentistry income on Schedule F as farm income.                              

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