- 9 -
adequate books and records or to substantiate items properly.
Sec. 1.6662-3(b)(1), Income Tax Regs. We have no difficulty in
finding that petitioners are guilty of negligence for both years
before the Court.6 They claimed deductions that are clearly
improper and made no attempt to keep satisfactory records as
required by section 6001. Petitioners claim that they used
“Turbo Tax”, a computer program for preparing tax returns, and
any fault lies with that program. While section 6664(c) provides
an exception for a portion of the underpayment due to reasonable
cause, petitioner’s have not shown reasonable cause here. The
“Turbo Tax” program depends on the entry of correct information.
Petitioners certainly knew that they were deducting personal
expenses when they entered items such as routine meals,
clothing, insurance, etc. Respondent’s determinations are
sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect respondent’s concessions at trial,
Decision will be entered
under Rule 155.
6 Respondent has met his burden of production with respect
to the penalties, sec. 7491(c), and petitioners bear the burden
of proof, Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001).
Page: Previous 1 2 3 4 5 6 7 8 9 10
Last modified: May 25, 2011