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pleasure from his stock car activity. This factor favors
respondent.
Petitioners place great reliance on the case of Mills v.
United States, 699 F. Supp. 1245 (N.D. Ohio 1988), which held
that a taxpayer’s motorcycle racing activity qualified as a trade
or business. Unlike the taxpayer in Mills, however, Tony had no
separate bank account for his stock car activity, retained no
business and financial adviser to aid him in his racing
activities, participated in no special exhibitions to attract
financial sponsorship of large companies, and never actually
raced his vehicle (except in the ill-fated qualifying round).
On the basis of all the evidence, we conclude that
petitioners have failed to demonstrate that Tony entered into the
stock car activity with a good faith expectation of making a
profit. Accordingly, we sustain respondent’s determination on
this issue.
C. Accuracy-Related Penalty Pursuant to Section 6662(a)
Respondent determined that petitioners are liable for the
accuracy-related penalty under section 6662. Section 6662(a)
imposes a 20-percent penalty on any portion of an underpayment
that is attributable to, among other things, negligence or
disregard of the rules or regulations or any substantial
understatement of income tax. Negligence is the lack of due care
or failure to do what a reasonable and ordinarily prudent person
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