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case (Swingler v. Commissioner, T.C. Memo. 1990-437) and when
taxpayers failed to respond to the Commissioner’s requests to
substantiate deductions claimed on their returns. Birth v.
Commissioner, 92 T.C. 769 (1989); Swingler v. Commissioner,
supra.
We find the facts of this case are similar to those in Birth
v. Commissioner, supra at 770, 774-775, in which this Court
awarded damages10 under section 6673 for the taxpayers’
unreasonable failure to pursue available administrative remedies.
The taxpayers in Birth refused to attend an audit and failed to
substantiate deductions for expenses allegedly incurred in their
business activities.
In the instant case, petitioners repeatedly ignored
respondent’s requests to substantiate the deductions petitioners
claimed on their return for 1996 and failed to respond or
cooperate in respondent’s audit. Petitioners have no one to
blame but themselves for their failure to keep complete and
adequate records and their failure to provide substantiation in
response to respondent’s requests. This is a substantiation case
10 Congress changed the terminology of sec. 6673(a) from
“damages” to “penalty” in sec. 7731(a) of the Omnibus Budget
Reconciliation Act of 1989, Pub. L. 101-239, 103 Stat. 2400. The
legislative history to the Omnibus Budget Reconciliation Act of
1989 makes clear that the United States need not prove specific
damages for this Court to impose a penalty under sec. 6673. H.
Rept. 101-247, at 1399 (1989).
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