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C. Conclusion
After considering the factors listed in section 1.183-2(b),
Income Tax Regs., all contentions presented by the parties, and
the unique facts and circumstances of this case, we conclude that
petitioner entered into the activity of mining with a dominant
hope and intent of realizing a profit. See Wolf v. Commissioner,
4 F.3d at 713; Vorsheck v. Commissioner, 933 F.2d at 758; Machado
v. Commissioner, T.C. Memo. 1995-526; Warden v. Commissioner,
T.C. Memo. 1995-176. We hold that petitioner’s mining activity
during the years in issue was an activity engaged in for profit
within the meaning of section 183.
II. Section 6662(a) Penalty
In his notices of deficiency, respondent determined that
petitioner was liable for an accuracy-related penalty due to
negligence or disregard of rules or regulations for each of the
years in issue. Section 6662 authorizes respondent to impose an
accuracy-related penalty equal to 20 percent on the portion of an
underpayment attributable to, among other things, negligence or
disregard of rules or regulations. See sec. 6662(a), (b)(1), and
(c). “Negligence” includes any failure to make a reasonable
attempt to comply with the provisions of the internal revenue
laws, to exercise ordinary and reasonable care in the preparation
of a tax return, to keep adequate books and records, or to
substantiate items properly. Sec. 6662(c); Allen v.
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