Warren Jack Kidder and Barbara Jeanne Kidder - Page 9

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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               
               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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