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Petitioner knew that he would owe tax as a result of the
distribution of profits from Mercer, but petitioners failed to
make estimated tax payments and paid only $500 when they filed
their return. Nevertheless, petitioners argue they had
reasonable cause for their failure to timely pay their full tax
liability because they made reasonable efforts to conserve
sufficient assets in marketable form to satisfy their tax
liability but were nevertheless unable to pay the tax when it
became due. Petitioners assert they invested the profits
received from Mercer with Merrill Lynch “into stocks like Intel
and high tech stocks and things that were safe”. However,
petitioners assert that “Merrill Lynch lost it”, leaving
petitioners unable to satisfy their tax obligations. Petitioner
testified that he believed he was making a conservative
investment and he “thought it was the same thing as a bank.”
While petitioners provided Ms. Russo with bank statements to
support their contention that they were unable to pay their
outstanding tax liability, they did not provide Ms. Russo with
information regarding their investment with Merrill Lynch. Other
than petitioner’s testimony, there is no evidence in the record
concerning petitioners’ investment with Merrill Lynch, or that
such an investment was even made. Other than stating they
invested in “stocks like Intel and high tech stocks”, petitioners
have not specifically identified what stocks they invested in.
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Last modified: November 10, 2007