Jose Calvao - Page 13

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          established that Mr. Beauregard was a competent professional who            
          had sufficient expertise to justify reliance, petitioner has not            
          shown that he acted with reasonable cause and in good faith.  See           
          sec. 6664(c)(1); Neonatology Associates v. Commissioner, supra at           
          98-99.  Therefore, we find petitioner is liable for an accuracy-            
          related penalty under section 6662(a) of $3,419.                            
          III. Conclusion                                                             
               Petitioner was not engaged in the trade or business of                 
          gambling in 2002.  For all of the foregoing reasons, we hold                
          petitioner is liable for a deficiency in his 2002 Federal income            
          tax of $17,096 and an accuracy-related penalty under section                
          6662(a) of $3,419.                                                          
               In reaching our holdings, we have considered all arguments             
          made, and, to the extent not mentioned, we conclude that they are           
          moot, irrelevant, or without merit.                                         
               To reflect the foregoing,                                              

                                                  Decision will be entered            
                                             for respondent.                          

               8(...continued)                                                        
          for that activity.  Mr. Beauregard’s preparation of petitioner’s            
          returns for 1993-2001 does not establish that Mr. Beauregard had            
          sufficient expertise regarding the tax treatment of petitioner’s            
          gambling activity.  In fact, despite the clear requirement of               
          sec. 165(d) that gambling losses may be claimed only to the                 
          extent of gambling winnings, petitioner claimed gambling losses             
          that exceeded his gambling winnings by $50,650.  In addition, the           
          gambling losses were claimed as costs of goods sold.  At the                
          least, this calls into question Mr. Beauregard’s expertise.                 




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