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testimony regarding his cost of sales other than his testimony
that he paid his drivers in cash.
Because we do not disturb respondent’s determination based
solely on petitioner’s self-serving testimony that the Schedule C
deductions claimed are correct and accurate, we sustain
respondent’s determination disallowing petitioner’s Schedule C
deductions. See Geiger v. Commissioner, T.C. Memo. 1969-159,
(citing Halle v. Commissioner, 7 T.C. 245, 247 (1946), affd. 175
F.2d 500 (2d Cir. 1949)), affd. 440 F.2d 688 (9th Cir. 1971); see
also Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) (“we are not
required to accept the self-serving testimony of petitioner * * *
as gospel”).
Section 6662 Accuracy-Related Penalty
Section 6662 imposes an accuracy-related penalty upon any
underpayment of tax resulting from negligence or disregard of the
tax rules or regulations or from any substantial understatement
of income tax. Negligence includes the failure of a taxpayer to
keep proper records or to substantiate his reported expenses.
Sec. 1.6662-3(b)(1), Income Tax Regs. The penalty does not
apply, however, to any portion of the underpayment for which
there was reasonable cause and with respect to which the taxpayer
acted in good faith. Sec. 6664(c)(1); sec. 1.6664-4(b), Income
Tax Regs.
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