Manuel and Luella J. Delara - Page 9




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          certain expenses that were substantiated to respondent's                    
          satisfaction, the Court considers petitioners' claim that they              
          should not be liable for the section 6662(a) penalty to be                  
          frivolous and groundless.  Petitioners knew that a substantial              
          portion of the itemized deductions at issue was false and could             
          not be sustained.  Petitioners should have had reservations at              
          the time the return was filed as to the accuracy of the claimed             
          itemized deductions, particularly when they were never requested            
          by the return preparer as to the amount of and/or the                       
          documentation to substantiate the amounts reported on the return.           
          Petitioners knew that they were entitled to deduct only amounts             
          that they had actually paid.  They made no attempt to determine             
          the qualifications of their return preparer; they did not consult           
          with tax professionals as to the accuracy of Mr. Beltran's                  
          representations; and, moreover, they cited no legal authority to            
          the Court that, under similar facts, would exonerate them from              
          the penalties under section 6662(a).                                        
               The function of this Court is to provide a forum to decide             
          issues relating to liability for Federal taxes.  At trial,                  
          petitioners realized that they had no case with respect to the              
          deficiency but chose to continue to challenge the imposition of             
          the penalty under section 6662(a).  Any reasonable and prudent              
          person, under the facts presented to the Court, should have known           
          that the claimed deductions could not have been sustained, and              





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