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often used interchangeably with compensation. Respondent did not
disallow any part of petitioner’s compensation expense deduction.
(4) Neither Steve, who had signed, nor Bedevian, who had prepared
petitioner’s fiscal 1990 tax return, both of whom testified,
provided us with evidence as to what were the intended components
of petitioner’s claimed $101,517 rent expenses deduction.
Based on the foregoing we conclude that petitioner has
failed to persuade us that it is more likely than not that
petitioner’s deductible rent expenses exceed $15,517.
We hold for respondent on this issue.
III. Section 6662
Respondent determined that petitioner is liable for an
accuracy-related penalty for negligence in the amount of 20
percent of the entire underpayment. Respondent contends that
“petitioner failed to exercise due care or do what a reasonable
and ordinarily prudent person would do under the circumstances.”
Alternatively, respondent contends that petitioner is liable for
an accuracy-related penalty in the amount of 20 percent of the
entire underpayment for substantial understatement of tax.
Petitioner maintains that it has no deficiency and therefore
is not liable for an accuracy-related penalty under section 6662.
We agree with respondent.
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