Thomas C. Sandoval, Jr. and Bobbie J. Sandoval - Page 22

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          their gross income in other years did not offset those losses.              
          See Jones v. Commissioner, 25 T.C. 1100, 1104 (1956), revd. and             
          remanded on other grounds 259 F.2d 300 (5th Cir. 1958).                     
               Dan Mitchell, petitioners’ return preparer, testified that             
          petitioners’ tax returns show that they are entitled to NOL                 
          carryforwards and carrybacks and investment tax credit                      
          carryforwards.  Tax returns alone do not establish that a                   
          taxpayer is entitled to NOL carryforwards or carrybacks or                  
          investment tax credit carryforwards.  See Wilkinson v.                      
          Commissioner, 71 T.C. 633, 639 (1979); Roberts v. Commissioner,             
          62 T.C. 834, 837, 839 (1974).  Petitioners offered no other                 
          evidence about their NOL carryforwards or carrybacks or                     
          investment tax credit carryforwards.  We conclude that                      
          petitioners may not claim NOL carryforward or carryback                     
          deductions or investment tax credits carried forward to the years           
          in issue.                                                                   
          G.   Whether Petitioners Are Liable for the Addition to Tax for             
               Late Filing                                                            
               Petitioners contend that they are not liable for the                   
          addition to tax under section 6651(a)(1) for their failure to               
          file timely their income tax returns for each year in issue                 
          because:  (1) They correctly reported that there was no tax due             
          for the years in issue, (2) they had reasonable cause to file               
          their returns late because petitioner had problems keeping office           
          staff who could provide the necessary information to help prepare           

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