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4. whether petitioner Rhett Rance Smith’s cutting horse
activity constituted an activity engaged in for profit within the
meaning of section 183(a); and
5. whether petitioners are liable for section 6662(a)
accuracy-related penalties for negligence or disregard of rules
or regulations with respect to the above-referenced charitable
contribution deductions and/or their section 183 activities.
FINDINGS OF FACT
Background
Petitioners Rhett Rance Smith (Rhett) and Alice Avila Smith
(Alice) are married and resided in Scottsdale, Arizona, at the
time their petitions were filed. They timely filed Forms 1040,
U.S. Individual Income Tax Return, for 1998, 1999, 2000, 2001,
and 2002. On April 15, 2005, respondent sent notices of
deficiency to Rhett and Alice for their 1998, 1999, 2000, and
2001 tax years. On March 25, 2005, respondent sent a notice of
deficiency to Rhett and Alice for their 2002 tax year.
Petitioners Joel Rance Smith (Rance) and LaRhea Smith
(LaRhea) are married and resided in Eagle Point, Oregon, at the
time their petitions were filed. They timely filed Forms 1040 for
1998, 1999, 2000, and 2001. On April 15, 2005, respondent sent
notices of deficiency to Rance and LaRhea for their 1998, 1999,
2000, and 2001 tax years.
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