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of no use to petitioner after May 31, 1995, and was abandoned by
it in 1997. In fact, by petitioner’s count, almost all of its
vehicles were not used by it after that date and were abandoned
in 1997. Given that petitioner makes no claim that it abandoned
any vehicle purchased after May 31, 1995, that the record does
not persuade us that petitioner in fact purchased any vehicles
after that date, and that approximately 40 percent of
petitioner’s work on the contract remained to be performed after
May 31, 1997, we decline to accept petitioner’s implication that
it finished its work on the contract with virtually no vehicles.
We sustain respondent’s determination as to the deficiency.4
3. Addition to Tax
Section 6651(a)(1) imposes an addition to tax for failing to
file a return on or before the due date unless it is shown that
this failure is due to reasonable cause and not due to willful
neglect. Reasonable cause may exist if a taxpayer exercised
ordinary business care and prudence and was nonetheless unable to
file the return within the date prescribed by law. Sec.
301.6651-1(c)(1), Proced. & Admin. Regs. Willful neglect means a
4 In so doing, we also note that Laxton testified that he
ascertained in the fall of 1997 the equipment that would be left
in California. This being so, petitioner’s claimed loss on the
abandonment of that equipment was not deductible by it for the
subject year. CRST, Inc. v. Commissioner, 92 T.C. 1249 (1989)
(taxpayer that alleged an intent to abandon asset in a year was
precluded from deducting an abandonment loss for that year
because it did not show that it actually abandoned the asset in
that year), affd. 909 F.2d 1146 (8th Cir. 1990).
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