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his 1985 tax year, and, on June 9, 1987, respondent issued a no-
change letter. Petitioners claim that they reasonably relied on
this letter in claiming the deductions in 1995 and 1996.
A failure by the Commissioner to disallow similar deductions
in a prior year’s audit of a taxpayer’s return may be a factor to
be considered with respect to the imposition of the accuracy-
related penalty. Sheehy v. Commissioner, T.C. Memo. 1996-334.
However, petitioners have produced no evidence regarding the
circumstances of the previous year’s audit and whether they
claimed deductions on a similar basis as in their 1995 and 1996
returns. The no-change letter they produced is silent regarding
the circumstances of the audit, and the facts in 1985 are not
necessarily comparable to those that existed in 1995 and 1996.
We hold that petitioners have not shown reasonable reliance on
respondent’s no-change letter. We sustain the accuracy-related
penalties as determined.
Decision will be
entered under Rule 155.
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