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for tax year 1988 until June 17, 1997. The record also shows
that respondent did not receive a copy of Form 1099 prior to the
commencement of petitioners’ respective audits. As noted above,
we found that petitioners did not substantiate the Schedule C
expenses deducted on their 1988 return. Based on the record, we
can find no credible basis for the Schedule C deductions claimed.
Petitioner was a tax preparer during the years in issue. It goes
without saying that as a tax preparer petitioner should have
understood the substantiation requirements for deductions claimed
on their Schedule C.
Because petitioners failed to offer any credible explanation
for their lack of due care in preparing and filing their 1988
return, they are liable for an addition to tax under section
6653(a)(1).
We have considered all arguments by the parties, and, to the
extent not discussed above, conclude that they are irrelevant or
without merit.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decisions will be entered
under Rule 155 in docket No.
4479-00S and for respondent in
docket No. 4480-00S.
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