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record that Mr. Beltran knew, or had reason to know, all the
relevant facts upon which, had he been a qualified professional,
he could have accurately advised petitioners on the amount of
their allowable deductions. Mr. Beltran never sought the correct
amount of petitioners' charitable contributions and employee
business expenses, nor did petitioners offer any evidence of
these expenses. The Court is further satisfied that petitioners
knew they were required by law to substantiate all items of
income and expense shown on their returns. Based on the
overpayments shown on the returns, which petitioners were well
aware of, and which substantially exceeded the amounts generally
received by them in prior years, petitioners had reason to know
that the claimed overpayments had to be based on erroneous
information on the returns. Petitioners were far more impressed
with the bottom-line numbers than the numbers used to arrive at
the results shown on the returns. On this record, the Court
sustains respondent on the section 6662(a) accuracy-related
penalty for 1999.
Section 6673(a) authorizes the Court to require a taxpayer
to pay to the United States a penalty not exceeding $25,000 when,
in the Court's judgment, proceedings have been instituted or
maintained by the taxpayer primarily for delay or where the
taxpayer's position in the proceeding is frivolous or groundless.
Although petitioners conceded the deficiency, after allowance for
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Last modified: May 25, 2011