- 10 - Rinehart v. Commissioner, T.C. Memo. 2002-9. Respondent conceded that if the Court determined the horse breeding activity was engaged in for profit, then petitioners substantiated the expenses deducted for the horse breeding activity. Accordingly, there is no underpayment of tax attributable to the horse breeding activity and thus no accuracy-related penalty associated with the horse breeding activity. With regard to the COD income, we do not believe imposition of the accuracy-related penalty is appropriate. Ms. Yeager did not receive a Form 1099 reporting the COD income. She was unaware of the Form 1099-C until she was contacted by the IRS during the audit of her 1994, 1995, and 1996 tax years. Accordingly, we hold the she is not liable for the accuracy- related penalty attributable to the COD income. Petitioners failed to present evidence to establish that they acted with reasonable cause and in good faith with regard to any of the other issues, including those they conceded.9 Accordingly, we hold that petitioners are liable for the accuracy-related penalties as to those issues. In reaching all of our holdings herein, we have considered all arguments made by the parties, and to the extent not 9 Petitioners make assertions in their briefs regarding these other issues; however, assertions on brief are not evidence. Rule 143(b).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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