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not rely on his business records does not mean that he
negligently prepared petitioners’ 1994 and 1995 returns. We
disagree.
Petitioners’ claim that they were not negligent because the
cancellation of indebtedness issue was technical is belied by the
fact that they received a Form 1099-C for 1994 reporting the
cancellation of indebtedness income, yet they did not report the
income or disclose on their 1994 return that they received the
Form 1099-C. Similarly, petitioners cannot plead ignorance to
the requirements for claiming bad debts since they availed
themselves of its benefits. They did not consult an accountant.
Petitioners’ claim that they were not negligent because
respondent’s bank deposits method is inaccurate misses the mark
since petitioners agreed to all of respondent’s adjustments to
gross income.
Petitioners point out that the taxpayers in Tudyman v.
Commissioner, T.C. Memo. 1996-215; Heasley v. Commissioner, 902
F.2d 380 (5th Cir. 1990), revg. T.C. Memo. 1988-408; and Streber
v. Commissioner, 138 F.3d 216 (5th Cir. 1998), revg. T.C. Memo.
1995-601, were found not liable for negligence. We disagree that
these cases are analogous to the instant case. In Tudyman, the
taxpayer made a reasonable attempt to estimate her loss from an
earthquake by relying on an appraiser’s estimates. Here,
petitioners did not rely on the advice of an accountant or other
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