Alex and Tonja Oria - Page 2

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          stipulation), which we accept.  Among other things, the                     
          stipulation disposes of the deficiency in tax and accuracy-                 
          related penalty for 1999.  The stipulation also provides that               
          petitioners’ taxable income, as reported on their 2000 Form 1040,           
          U.S. Individual Income Tax Return (the Form 1040), is increased             
          by $313,804.  At the trial, petitioners conceded that a $70,000             
          portion of their reported bad debt deduction of $185,000 for 2000           
          was not allowable.  Respondent agreed that petitioners would be             
          allowed a bad debt deduction of $120,000 (which amount,                     
          intentionally, is $5,000 greater than the difference between                
          $185,000 and $70,000).  Petitioner further agreed that the                  
          underpayment in tax resulting from the disallowed portion of the            
          deduction ($65,000) would be subject to the accuracy-related                
          penalty.  We accept that concession and those agreements.  That             
          leaves for our disposition only the question of whether the                 
          accuracy-related penalty applies to any or all of the                       
          underpayment in tax resulting from the stipulation that                     
          petitioners underreported their 2000 taxable income by $313,804.            
               All section references are to the Internal Revenue Code of             
          1986, as amended and in effect for 2000, and all Rule references            
          are to the Tax Court Rules of Practice and Procedure.                       

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