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inflated amounts on Mr. Beltran's returns as "too good to be
true". 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 never sought the correct amount of petitioners'
charitable contributions and employee business expenses. The
Court is further satisfied that petitioners knew they were
required under the law to substantiate deductions claimed on
their returns and, moreover, knew that the amounts on their
returns for charitable contributions and unreimbursed employee
business expenses were not only questionable but were incorrect.
On this record, the Court sustains respondent on the section
6662(a) accuracy-related penalties for 1999 and 2000.
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.
Although petitioners conceded the deficiencies and challenged
only the penalties under section 6662(a), the Court considers
petitioners' claim that they should not be liable for the
penalties to be frivolous and groundless. Petitioners knew that
a substantial portion of the itemized deductions at issue was
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Last modified: May 25, 2011