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4(b)(1), Income Tax Regs.
The record does not contain one iota of credible evidence
that petitioners had a reasonable basis for claiming the disputed
NOL carryforward deductions or that they acted in good faith by
doing so. Petitioners ignored our 1996 decision in Beery I,
which held that petitioners cannot carry forward and apply an NOL
from 1975 to offset their taxable income for years beyond 1980,
when they prepared and filed their 1998 and 1999 returns.
Petitioners continued to dispute the validity of Beery I and
continued to deduct an asserted 1975 NOL carryforward over a
period of several years, including the years at issue.
Petitioners’ entire course of conduct reflects a determined
effort to claim undocumented and/or unuseable NOL carryforwards
from 1975 over a period of many years while ignoring applicable
law and relevant facts. Petitioners’ intransigence does not
qualify as reasonable cause for the 1998 and 1999 underpayments.
We sustain respondent’s determination regarding the section 6662
penalties.
We have considered the remaining arguments of petitioners
for results contrary to those expressed herein and, to the extent
not discussed above, find those arguments to be irrelevant, moot,
or without merit.
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Last modified: May 25, 2011