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the returns, and she assumed the items were therefore correct.
Petitioners did not have the returns reviewed by an accountant or
anyone else outside the Hoyt organization prior to signing them.
The section 6662(a) accuracy-related penalty in this case is
derived solely from the loss that petitioners claimed in 1991
with respect to DSBS 87-C. Respondent issued a Notice of Final
Partnership Administrative Adjustment (FPAA) to petitioners with
respect to DSBS 87-C that reflected the disallowance of various
deductions claimed on the partnership return for its taxable year
ending in 1991. Because a timely petition to this Court was not
filed in response to the FPAA issued for DSBS 87-C, respondent
made a computational adjustment assessment against petitioners
with respect to the FPAA. The computational adjustment of
$40,892 changed petitioners’ claimed DSBS 87-C loss of $32,306 to
income of $8,586, increasing petitioners’ tax liability by
$7,724, from $799 to $8,523.3 In the notice of deficiency
underlying this case, respondent determined that petitioners are
liable for the section 6662(a) accuracy-related penalty for
negligence or disregard of rules or regulations with respect to
the entire amount of the underpayment resulting from the DSBS 87-
C computational adjustment.
3The amount of the farm income reported by petitioners on
their 1991 return was not changed by respondent pursuant to the
computational adjustment assessment, presumably because the farm
income was not a partnership item.
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