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its own trade or business, under the standards of Lohrke v.
Commissioner, supra, and similar cases.12
The remaining issue for consideration is whether HIF is
liable for the accuracy-related penalty under section 6662(a) and
(b)(1) (negligence or disregard of rules or regulations) with
respect to the claimed deduction for the payment of legal fees.
The term “negligence” includes any failure to make a reasonable
attempt to comply with the Internal Revenue Code, and the term
“disregard” includes any careless, reckless, or intentional
disregard. Sec. 6662(c). Given that HIF’s reporting position
was consistent with our holding in Jack’s Maintenance
Contractors, Inc. v. Commissioner, supra, we find there was no
negligence or disregard of rules or regulations on the part of
HIF.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
Reviewed by the Court.
WELLS, CHABOT, COHEN, PARR, RUWE, WHALEN, COLVIN, HALPERN,
BEGHE, CHIECHI, FOLEY, VASQUEZ, THORNTON, and MARVEL, JJ., agree
with this opinion.
LARO, J., concurs in result only.
12 Because we conclude that petitioner HIF does not come
within the terms of the exception provided in Lohrke v.
Commissioner, 48 T.C. 679 (1967), we do not consider the impact
of the origin-of-the-claim doctrine announced in United States v.
Gilmore, 372 U.S. 39 (1963), on the deduction of the legal
expenses of another by a taxpayer meeting the terms of the
exception provided in Lohrke.
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