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fee of $100. In exchange, petitioner received a variety of tax-
related products, services, and advice from Renaissance.
Neither petitioner nor Cecilia Abloso was otherwise engaged in
any home-based business during 2000. In essence, petitioner did
little more than pay a monthly membership fee to TRS for
generally misleading or ill-advised tax products and services.
Petitioner’s participation in the TRS program hardly constitutes
a trade or business within the meaning of section 162(a).4
Petitioners are not entitled to the Schedule C deductions claimed
on their 2000 return, and respondent’s disallowances of those
deductions are sustained.
Respondent also determined that the underpayment of tax
required to be shown on petitioners’ 2000 return is due to
negligence or disregard of rules or regulations and imposed an
accuracy-related penalty under section 6662(a).5
Negligence is defined to include any failure to make a
reasonable attempt to comply with the provisions of the Internal
Revenue Code. It also includes any failure by the taxpayer to
keep adequate books and records or to substantiate items
properly. Sec. 6662(c); see also 1.6662-3(b)(1), Income Tax
4 We further note that petitioners failed to substantiate
any of the claimed Schedule C expenses other than petitioner’s
monthly payments to Renaissance.
5 Sec. 7491(c) places the burden of production on
respondent with respect to this penalty.
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