Karan M. Hintze - Page 23

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               With respect to the meal and entertainment expenses at issue           
          for the 1994 taxable year, we note that petitioner maintained               
          detailed records of the expenses for which she claimed a                    
          deduction.  While we have determined that petitioner failed to              
          satisfy the substantiation requirements under section 274 with              
          respect to some of these expenses, this determination does not              
          require a finding that petitioner has been negligent or in                  
          intentional disregard of respondent’s rules and regulations.  See           
          Robinson v. Commissioner, 51 T.C. 520, 542 (1968), affd. (but               
          vacated and remanded for recomputation of deficiency) 422 F.2d              
          873 (9th Cir. 1970); Silverton v. Commissioner, T.C. Memo. 1977-            
          198.  The records which petitioner offered to substantiate her              
          meal and entertainment expenses were not so inadequate as to                
          constitute a failure of due care on her part.  We therefore hold            
          that petitioner is not liable for the accuracy-related penalty              
          under section 6662(a) with respect to the portion of the                    
          underpayment attributable to the disallowed meal and                        
          entertainment expense deductions.  With respect to the remaining            
          portion of petitioner’s underpayment for 1994 and the entire                
          portion of petitioner’s underpayment for 1992, respondent’s                 
          determination of the accuracy-related penalty is sustained.                 
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             under Rule 155.                          

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