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3) whether Kevin D. Castro (petitioner) is liable for self-
employment taxes on the net income generated by the jewelry
business during the years at issue;
4) whether petitioners are liable for the accuracy-related
penalty for negligence or disregard of rules or regulations
pursuant to section 6662 for each of the years at issue; and
5) whether the Castros are liable for a penalty pursuant to
section 6673.
FINDINGS OF FACT
I. Background
The parties have stipulated some of the facts, which are
incorporated into our findings by this reference. At the time
the petitions in these cases were filed, the Castros resided, and
the CFT and the CCJT had their principal places of business, in
Cedar City, Utah.
In 1983, petitioner became a gemologist. In 1984,
petitioner and his brother formed a partnership in California to
operate a jewelry business called Castro & Co. (the partnership).
In 1992, the partnership closed its jewelry store in California
and opened a jewelry store in Cedar City, Utah. The Castros also
moved to Cedar City, Utah. For the taxable years 1984 through
1993, petitioner reported his distributive share of partnership
income on Schedule E, Supplemental Income and Loss, of his Form
1040, U.S. Individual Income Tax Return. The partnership
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