Michael D. and Suzan L. Storer - Page 22

                                       - 21 -                                         
               Petitioners contend that they believed in good                         
          faith that the expenses they claimed were allowable.  Good                  
          faith on the part of taxpayers, however, does not always negate             
          negligence.  Taxpayers are required to take reasonable steps to             
          determine the law and to comply with it.  Niedringhaus v.                   
          Commissioner, 99 T.C. 202, 222 (1992).  In this case,                       
          petitioners have not shown that their claimed deductions for                
          expenses were made with any significant regard to whether they              
          were personal in nature, and the record supports the inference              
          that petitioners’ photography activity was used to deduct                   
          personal expenses.  For the foregoing reasons, moreover, we do              
          not consider Mr. Storer to have acted reasonably with respect to            
          the deduction of those expenses claimed for his photography                 
          activity.  Based on our consideration of the entire record, we              
          sustain respondent’s determinations with respect to the accuracy-           
          related penalties for negligence for the years in issue.                    
               To reflect the foregoing,                                              

                                                  Decision will be entered            
                                             for respondent.                          

Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22

Last modified: November 10, 2007