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v. Commissioner, 116 T.C. 438, 446 (2001). Under Rule 34(b),
however, the taxpayer is required to assign error in the petition
to each and every error alleged to have been committed by the
Commissioner, including issues with respect to which the
Commissioner bears the burden of proof. Any issue not raised in
the assignments of error is deemed to be conceded. Id.; see also
Swain v. Commissioner, 118 T.C. 358, 363-364 (2002).
Petitioners did not assign error to the determination of the
penalty in their petition. Nor did they dispute the
determination at trial. Accordingly, the penalty is deemed to be
conceded. See Rule 34(b); Swain v. Commissioner, supra. Even if
petitioners had challenged the penalty, petitioners failed to
keep adequate books or records or to properly substantiate the
disallowed expense deductions. See sec. 1.6662-3(b)(1), Income
Tax Regs. Petitioners introduced no evidence to indicate their
failure was due to reasonable cause or good faith. See sec.
6664(c). Accordingly, respondent’s determination is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011