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proclaimed that they want to again participate in the Federal
income tax system.
We note that their wish to reenter is not without
conditions, however. Instead, they have set their own terms for
reentry. First, their terms of reentry include absolving them
from the fraudulent failure to file addition under section
6651(f) and rather finding them liable for the failure to file
addition under section 6651(a)(1). Second, Mr. Runkle seeks
additional business deductions, which he cannot substantiate.
Third, petitioners ask us to absolve them of the addition to tax
for failure to pay estimated taxes under section 6654(a) even
though petitioners failed to produce any evidence challenging
respondent’s determinations. In essence, petitioners, having
conceded respondent’s deficiency determinations, now condition
their reentry to the Federal tax system on their own terms, not
those by which all other taxpayers must comply.
We begin with whether petitioners’ failure to file Federal
income tax returns was fraudulent under section 6651(f). We then
decide whether Mr. Runkle is entitled to business expenses in
excess of those allowed by respondent in the deficiency notice,
and then whether petitioners are liable for the estimated tax
addition under section 6654(a).
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