Michael G. and Kate M. Lavigne - Page 8




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          Otherwise, there would be no way of knowing whether the sum of              
          the losses deducted on the return is greater or less than the               
          taxpayer's winnings.  Schooler v. Commissioner, supra at 869.               
          For example, if the taxpayer, in addition to the winnings                   
          reported on a return, had other winnings that were not reported,            
          then the taxpayer must prove that the losses claimed as a                   
          deduction on the return exceeded the unreported winnings in order           
          to be entitled to deduct any such losses.  Donovan v.                       
          Commissioner, supra.  The amount deductible in such situation is            
          the amount of the claimed losses which exceeds the unreported               
          winnings, as long as such amount does not exceed the winnings               
          reported on the taxpayer's return.  Sec. 165(d); Schooler v.                
          Commissioner, supra; Donovan v. Commissioner, supra.  Here,                 
          petitioners did not prove the amount of their gambling winnings,            
          both reported and unreported, and, thus, they failed to prove               
          that the amount of the wagering losses deducted on the 1999                 
          return is greater than the unreported gains from gambling.                  
          Rodriguez v. Commissioner, T.C. Memo. 2001-36.  Respondent,                 
          therefore, is sustained in the disallowance of petitioners'                 
          $4,000 gambling loss deduction for 1999.                                    
               The second issue is whether petitioners are liable for the             
          section 6662(a) penalties.  Petitioners contend they should be              
          absolved of liability for such penalties because they relied on             
          the representations of their return preparer, Mr. Beltran.                  





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