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B. Whether Petitioner May Deduct More Business Expenses Than
Respondent Conceded
Petitioner contends that he may deduct more expenses for his
direct marketing activity for 1997 than respondent conceded
($9,644). We disagree. At trial, petitioner admitted that some
of the products he bought may have been for his own use and not
for product-testing purposes. Petitioner did not offer credible
evidence that he had more direct marketing expenses for 1997 than
the $9,644 that respondent conceded.
C. Whether Petitioner Is Liable for the Addition to Tax for
Failure To Timely File His 1997 Income Tax Return
A taxpayer is liable for an addition to tax up to 25 percent
for failure to timely file a return unless the failure was due to
reasonable cause and not willful neglect. Sec. 6651(a)(1).
Respondent has met the burden of production under section
7491(c) as to the addition to tax for failure to timely file
under section 6651(a)(1) because petitioner filed his 1997 return
on September 15, 1999, 17 months after it was due on April 15,
1998. Secs. 6072(a), 6012(a)(1).
Petitioner testified that he filed his return late because
he was busy with his marketing activity. This is not reasonable
cause for late filing. Dustin v. Commissioner, 53 T.C. 491, 507
(1969), affd. 467 F.2d 47 (9th Cir. 1972). Petitioner made no
other argument that he is not liable for this addition to tax.
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