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petitioner did not clearly testify that she produced to the
revenue agent the records necessary to support the NOL carryover
deductions claimed for the return years at issue. More
importantly, although petitioner introduced some documentation at
trial with respect to her claimed NOL deductions, the
documentation was insufficient to support a finding that she is
entitled to all or any portion of such carryforwards.
The principal problem with the trial record is that the
documentation, although substantial, is incomplete in many
respects. For example, petitioner introduced no records for 1977
or 1984-86 and insufficient records for 1980 and 1982, the years
in which petitioner claimed net operating losses, to enable us to
verify the losses or to show how the losses were absorbed in
other years.
Under the foregoing circumstances, we hold that petitioner
has failed to prove she is entitled to any portion of the
reported 1980-86 NOL carryforward.
II. Additions to Tax and Penalties
A. Section 6651(a)(1) Addition to Tax
Section 6651(a)(1) imposes a penalty equal to 5 percent of
the tax due for each month of delayed filing beyond the due date
(including extensions) up to a maximum of 25 percent “unless it
is shown that such failure [to file] is due to reasonable cause
and not due to willful neglect”.
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