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penalty for 2000.1 After concessions,2 the issues for decision
are: (1) Whether petitioners’ special education activity was
engaged in for profit during 1999 and 2000 (years in issue), and
(2) whether petitioners are liable for an accuracy-related
penalty under section 6662(a) for 2000.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time they filed
the petition, petitioners resided in Berkeley, California.
Michael Paul Remler (Dr. Remler) and Pauline M. Velez (Dr.
Velez) (collectively referred to as petitioners) are husband and
wife. During the years in issue, petitioners were employed full
time by the Department of Veterans Affairs. Dr. Remler is a
neurologist and previously served as the child neurologist for
1 Unless otherwise noted, all section references are to the
Internal Revenue Code, as amended, and all Rule references are to
the Tax Court Rules of Practice and Procedure.
2 Petitioners conceded they were liable for increases to
taxable income of: (1) $8,920 and $10,903 for 1999 and 2000,
respectively, resulting from disallowed deductions for real
estate losses; (2) $11,570 and $24,639 for 1999 and 2000,
respectively, resulting from disallowed deductions claimed in
connection with petitioner Velez’s Schedule C surgery activity;
(3) $1,118 for 1999 resulting from a disallowed Keogh deduction;
and (4) $3,249 for 2000 attributable to a State income tax
refund. The parties signed a Form 870, Waiver of Restrictions on
Assessment and Collection of Deficiency in Tax, regarding the
settled issues, and petitioners paid the additional tax liability
in full prior to trial.
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