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i.e, that they made a reasonable attempt to comply with the
provisions of the Internal Revenue Code and that they were not
careless, reckless, or in intentional disregard of the rules or
regulations.
We sustain respondent’s determination. In determining
whether petitioners were negligent in the preparation of their
return, we take into account Mr. Hagman’s years of business
experience. Glenn v. Commissioner, T.C. Memo. 1995-399, affd.
without published opinion 103 F.3d 129 (6th Cir. 1996).
Petitioners’ explanation of the Buck Sales issue was vague and
confusing, and they have failed to show that they were not
negligent with respect to their $76,000 deduction for purported
investments in Buck Sales. Because we have found that part of
petitioners’ underpayment for 1988 was due to negligence, the 5-
percent addition to tax provided in section 6653(a)(1) applies to
the entire underpayment regardless of whether the balance of the
underpayment was due to negligence.
Petitioners conceded part of the underpayment for 1989 and
also failed to address the question of negligence on those
concessions. With respect to the disputed issue for 1989 (the
bad debt deduction), petitioners claimed that the notes were
worthless at a time when they were actively trying to collect on
the notes in State court. Petitioners do not provide us with a
satisfactory explanation of this inconsistency and are therefore
liable for the section 6662(a) accuracy-related penalty with
respect to this issue. Due to petitioners’ failure to present
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