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We hold that petitioners are liable for the accuracy-related
penalties determined in the notice of deficiency. Petitioners
have failed to establish that any of the related underpayments
were not due to their negligence or disregard of rules or
regulations. As to the accuracy-related penalties alleged in
answer, however, we hold for petitioners. Respondent has not met
his burden of proof with respect to those amounts. E.g., Sproul
v. Commissioner, T.C. Memo. 1995-207. Whereas respondent in
brief recognizes that he bears the burden as to those amounts,
respondent concludes erroneously that petitioners are liable for
the accuracy-related penalties alleged in answer because they
have failed to disprove their liability for such amounts.
Respondent states:
Petitioners underreported their income for 1993,
1994, and 1995. Though their returns were prepared by
a tax service, petitioners did not present any evidence
as to their return preparer’s qualifications or to show
that the underreporting was due to any act of their
returns preparer or reliance upon his advice.
Moreover, they have introduced no evidence which could
serve as a basis for the Court to find that there was
reasonable cause for their underreporting.
Accordingly, petitioners should be held liable for the
accuracy-related penalty for 1994 [sic], 1994, and
1995, respectively.
All arguments of the parties not discussed herein have been
considered and rejected as meritless. Accordingly,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011