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Klieger v. Commissioner, T.C. Memo. 1992-734; sec. 1.6661-6,
Income Tax Regs.
Even if petitioners had requested a waiver under section
6661(c), the record demonstrates that they failed to act
reasonably and in good faith in deducting the claimed loss from
San Nicholas. Petitioner’s limited discussions with Mr. Kellen, a
promoter of other, similar jojoba partnerships and a close
personal friend and business associate of U.S. Agri’s president,
are insufficient to demonstrate reasonable cause and good faith.
Similarly, petitioners’ failure to establish the extent of any tax
advice received, as well as the basis on which such advice may
have been rendered, is further evidence of petitioners’ lack of
reasonable cause and good faith. See DePlano v. Commissioner,
T.C. Memo. 1998-303.
In view of the foregoing, we hold that petitioners are liable
for the addition to tax under section 6661(a) for substantial
understatement of tax liability. Respondent’s determination is
sustained.
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