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also have forgotten to record other sales of unknown amounts.
Petitioner’s testimony reveals that he was aware that invoices
may not have been prepared for a number of larger items sold by
FAP. Petitioner used the understated amount reflected by the
invoices to prepare summary sheets which he then provided to the
return preparer. Petitioner failed to inform the return preparer
that certain sales were omitted. In addition, petitioner did not
always deposit the proceeds from FAP’s sales into a bank
account; therefore, there was no record of some portion of the
sales.
Petitioners also contend that these unrecorded and
unreported sales were of minor consequence. However,
respondent’s reconstruction of petitioners’ income reflects
relatively sizable amounts of omitted income. As to the
remaining items making up the deficiency, apart from the capital
gain item, petitioners did not make any argument as to why
respondent’s determination was in error or that their return
position was reasonable. Therefore, we find petitioners liable
for the accuracy-related penalties on the resulting income tax
deficiencies.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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