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that it was received by the IRS, prior to or on the due date.
Nor have petitioners shown reasonable cause for the late filing.
Because petitioners have not shown respondent’s determination to
be in error, we find that petitioners are liable for the section
6651(a)(1) addition to tax for their 1992 tax year. See Rule
142(a).
Respondent also determined that petitioners are subject to a
section 6662 accuracy-related penalty because of negligence or
disregard of rules or regulations. Section 6662 provides for a
20-percent penalty on the portion of the underpayment to which
section 6662 applies. Respondent determined that the entire
underpayment is subject to the penalty for the 1992 and 1993
taxable years. No penalty is imposed with respect to an
understatement as to which the taxpayer acted with reasonable
cause and in good faith. See sec. 6664(c)(1).
Petitioners were advised by the bankruptcy attorney that
they could file a claim in bankruptcy for the advances they had
made to Mr. Bogue. They did so during 1992, and their claim was
discharged during the same year. Petitioners, who had capital
gains, were advised by their accountant/return preparer that they
were entitled to claim a capital loss for bad debts that they had
claimed and that were discharged in the bankruptcy. Considering
petitioners’ background, the circumstances of this case, and
petitioners’ reasonable reliance on professional advice, we hold
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