- 16 - similar provisions. * * * the taxpayer bears the burden of proof with regard to those issues.” Id. In the instant case, petitioners’ underpayment for each of the years at issue is attributable solely to their claimed gambling loss deduction for each such year. Petitioners concede that they did not keep the records required by the Code to substantiate each such loss deduction. Failure to keep adequate records is evidence not only of negligence, but also of inten- tional disregard of regulations. See sec. 1.6662-3(b)(1) and (2), Income Tax Regs.; see also Magnon v. Commissioner, 73 T.C. 980, 1008 (1980). On the record before us, we find that respon- dent has met respondent’s burden of production under section 7491(c). On that record, we further find that petitioners have failed to carry their burden of showing that they were not negligent and did not disregard rules or regulations, or other- wise did what a reasonable person would do, with respect to the underpayment for each of the years at issue. On the record before us, we also find that petitioners have failed to carry their burden of showing that there was reasonable cause for, and that they acted in good faith with respect to, the underpayment for each of the years at issue.12 See sec. 12On the instant record, we also find that petitioners have failed to carry their burden of showing that the respective underpayments for the years at issue are attributable to their reliance on a professional, such as an accountant. See sec. (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011