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expenses between business and personal use.” Petitioners did not
segregate their business and personal use of their automobiles.
Similarly, IRS Publication 334, at 127, states: “The cost
of restoring landscaping to its original condition after a
casualty may indicate the decrease in fair market value.”
Petitioners’ reliance on that publication to support their claim
that they are entitled to claim a casualty loss relating to the
pond is unwarranted because the excerpt relied on assumes that
the taxpayer has sustained a casualty loss; it does not indicate
how to determine that a casualty loss has occurred. Petitioners
do not cite any other language from Publication 334 which
supports their position here. Thus, the publication is not
authority for petitioners’ deduction of the pond restoration
expenses.
Petitioners were negligent and disregarded rules and
regulations. Petitioners did not indicate what advice they
received from Susan Barmes, who helped prepare their 1994 return,
and they did not have reasonable cause for deducting pond
restoration expenses or depreciation on their automobiles without
allocating between their business and personal use. We conclude
that petitioners are liable for the accuracy-related penalty for
1994.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011