Aziz A. Tokh and Susan K. Tokh - Page 15




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          comparison of the functions performed at the other locations                
          yields no definitive answer, and because petitioner spends a                
          small amount of time in the office in the home relative to the              
          remainder of his working hours, the office in the home is not the           
          principal place of business.  Therefore, petitioners fail to meet           
          the requirements of section 280A(c)(1)(A).  Furthermore, because            
          NIRC does not require petitioner to maintain an office in the               
          home and because the NIRC office building is available for                  
          petitioner to use 24 hours a day, petitioner does not maintain              
          the office in the home for the convenience of his employer.                 
          Thus, petitioners are not entitled to deductions for the alleged            
          expenses of maintaining the office in the home.                             
          Penalties                                                                   
               Section 6662(a) and (b)(1) imposes a penalty equal to                  
          20 percent of the portion of the underpayment that is                       
          attributable to negligence or disregard of rules or regulations.            
          Negligence is defined as a lack of due care or failure to do what           
          a reasonable or ordinarily prudent person would do under similar            
          circumstances.  See Neely v. Commissioner, 85 T.C. 934, 947                 
          (1985).  Negligence also includes any failure by the taxpayer to            
          keep adequate books and records or to substantiate items                    
          properly.  See sec. 1.6662-3(b)(1), Income Tax Regs.                        
               The deductions for unsubstantiated estimated expenses,                 
          duplicate deductions of amounts paid to their son, and deductions           





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