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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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