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Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
We must decide the following issues: (1) Whether petitioner
had unreported income. We hold that he did, to the extent
provided below. (2) Whether petitioner is entitled to a
depreciation deduction for towing equipment for each of the years
in issue. We hold that he is. (3) Whether petitioner is liable
for an addition to tax under section 6651(a). We hold that he
is. (4) Whether petitioner is liable for accuracy-related
penalties under section 6662(a). We hold that he is not.
Some of the facts have been stipulated and are so found. We
incorporate by this reference the stipulation of facts and
attached exhibits. At the time of filing the petition,
petitioner resided in Quaker City, Ohio.
From March 1990 to September 1994, petitioner operated a
service station in Barnesville, Ohio. The station had four
gasoline pumps, a diesel and kerosene pump, and two service bays.
In addition to fuel sales, petitioner sold miscellaneous items
such as chips, candy, soda pop, and tobacco. Also, petitioner
sold and installed tires and other auto parts in connection with
the station’s service and repair business. Petitioner closed the
service station in September 1994 because he was unable to make a
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