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for disregarding the regulations concerning the treatment of
NOL’s.7
In deciding whether petitioner was negligent, we take into
account the legal background and years of legal experience
possessed by petitioner’s owner(s). See Glenn v. Commissioner,
T.C. Memo. 1995-399, affd. without published opinion 103 F.3d 129
(6th Cir. 1996). P&G and its officer(s) operated a law practice
and should have realized that the advances were to be fully
reimbursed and that they should have been treated as loans, not
expenses, for Federal income tax purposes. Ample case precedents
supporting our holding were extant at the time P&G claimed the
deductions. In addition, petitioner has not demonstrated that it
made a reasonable attempt to comply with the regulations
concerning the election to carry forward NOL’s. Under the
circumstances here, we cannot agree with petitioner, which
operates a law practice, that the inquiry made to respondent
7 Respondent also determined that petitioner was liable for
a sec. 6662(b)(2) penalty because its underpayment was
substantial. As a result of our holding with respect to the
negligence penalty, we need not address respondent’s alternative
penalty determination.
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