- 13 - On brief, the individual petitioners argue that they should not be liable for the negligence penalty because “the Commissioner at least impliedly approved a similar deduction on their 1990 individual income tax return.” The record does not establish that respondent either implicitly or expressly approved a similar deduction in 1990. The only pertinent evidence apart from Mowrey’s vague and self-serving testimony5 is respondent’s no-change letter from 1990 and a revenue agent’s report which indicates that the only items questioned in the 1990 audit were a charitable contribution deduction and a deduction for investment expenses. There is no evidence that the revenue agent was even aware of, much less approved, petitioners’ diversion of income to Crestmark. In support of their position, the individual petitioners cite Matthews v. Commissioner, 92 T.C. 351 (1989), affd. 907 F.2d 5 On direct examination, Mowrey testified as follows: Q. Did you pay Crestmark that year, 1990, for the same type of services that you later paid them in 1993? A. Yes, sir. Q. In the audit, do you know what the outcome of the audit was? A. Well, I don’t know all these fancy words that he was talking about, but the bottom line is, to me, was the IRS said, you know, This is not a problem; this is fine, you know.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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