Nathan Jaramillo and Davina Metzgar - Page 10




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          knew that their claimed deductions were not based on the amounts            
          they actually expended.  That circumstance should have prompted             
          petitioners to determine whether such representations by their              
          return preparer were correct.  They did not consult other tax               
          professionals to verify the accuracy of the returns prepared by             
          Mr. Beltran or the representations he made to them regarding                
          their deductions.  The Court is satisfied from the 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 listed unrealistic amounts as deductions           
          on petitioners' returns, which they conceded at trial.                      
          Petitioners knew they were required under the law to substantiate           
          deductions claimed on their returns.  The circumstances should              
          have prompted them to look beyond and ascertain the accuracy of             
          their preparer's representations.  Petitioners, therefore, made             
          no effort to assess their tax liabilities correctly.  On this               
          record, the Court sustains respondent on the section 6662(a)                
          accuracy-related penalties for the years in question.                       
               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.           





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