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acted in good faith, and there was a reasonable cause for the
portion of the underpayment relating to the ordinary and capital
loss deductions.
Petitioner also established that he acted in good faith and
had reasonable cause for claiming expenses for road dues,
mortgage interest, and professional fees relating to his rental
property. Although petitioner, at trial, was unable to
substantiate these deductions, at the time he filed his return he
took reasonable efforts to determine the deductibility of these
expenses. Petitioner did not, however, present any evidence that
he exercised good faith and had reasonable cause for claiming
deductions for state and local taxes and unreimbursed employee
expenses. Accordingly, the accuracy-related penalty is
applicable to the portion of the underpayment attributable to
those items.
Contentions we have not addressed are either irrelevant,
moot, or meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011