Charles R. Godwin et al. - Page 20

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          Proced. & Admin Regs.  A taxpayer who has invested funds in                 
          illiquid or speculative assets has not exercised ordinary                   
          business care and prudence unless, at the time of the investment,           
          (1) the remainder of his assets and estimated income will be                
          sufficient to pay the tax, or (2) it reasonably can be foreseen             
          that the investment can be used to realize sufficient funds to              
          satisfy the tax liability.  Id.                                             
               Petitioners argue they had reasonable cause for failing to             
          pay on time because they did not have the financial ability to              
          pay the taxes on time.  We reject petitioners’ argument.                    
               The 1997 net profit from petitioner’s law practice was more            
          than four times the tax liability shown on petitioners’ return.             
          Petitioners had much more than enough money in 1997 to pay their            
          tax liability when it was going to fall due on April 15, 1998.              
               Petitioners did not invest enough of the 1997 law practice             
          net profit in marketable form such as CDs or a savings account to           
          preserve the liquidity needed to pay the tax liability on time.             
          Any hardship petitioners would have encountered from a forced               
          sale of their property would have been of their own making                  
          because they used most of the law practice net profit to pay for            
          the Atmore residence, to invest in illiquid timberland, and to              
          more than triple their previous 3 years’ charitable                         
          contributions.  They did all this over a period when they could             
          have instead estimated the order of magnitude of their 1997 tax             

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