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6662(a). Respondent contends that Michael’s “substantial
omissions of income and other factors set forth above [e.g.,
Michael’s failure to keep adequate books and records]” clearly
show that the negligence penalties apply in the instant case.
Petitioners do not appear to contest this.32
Accordingly, we conclude that section 6662(a) applies for
each year in issue to that portion, if any, of Michael’s
underpayments determined in the Rule 155 computation to be
attributable to items other than the unreported Schedule C gross
receipts.
To take account of the parties’ concessions and the
foregoing,
Decision will be entered
under Rule 155.
32 Petitioners argued that reasonable cause excused their
failure to report one-half of their respective spouse’s income on
their separate tax returns. Because we concluded that
petitioners properly filed for registry their marriage contract
so as to keep their respective incomes the separate property of
the income-earning spouse, we need not address this defense to
the negligence penalty.
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