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Schedule C gross receipts and cost of goods sold were based on
oral representations of petitioners’ bookkeeper. No indication
has been given as to what documentation led to the partnership
loss deduction. The record is silent as to petitioners’ personal
role in supplying information. We do not know whether
petitioners, before signing their Form 1040, even questioned
their preparer as to why an allegedly inoperative business was
returned in such a manner. In sum, we cannot with any confidence
say that petitioners took reasonable care in attempting to
ascertain their proper tax liability. We hold that petitioners
are liable for the section 6662(a) accuracy-related penalty.
To reflect the foregoing,
Decision will be entered
for respondent.
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