Donald P. and Margie C. Osborne - Page 5

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          rebut respondent’s determinations, and the determinations are, as           
          adjusted by the parties’ stipulation, therefore, sustained.                 
               With respect to 2001 and 2002, respondent determined that              
          petitioners were liable for accuracy-related penalties pursuant             
          to section 6662(a).  The penalty applies to any portion of                  
          petitioners’ underpayment that is attributable to negligence or             
          disregard of rules or regulations.  See sec. 6662(b)(1).                    
          Respondent bears and has met the burden of production relating to           
          the section 6662(a) accuracy-related penalties and has                      
          established that petitioners were negligent in the filing of                
          their 2001 and 2002 returns.  See sec. 7491(c); Higbee v.                   
          Commissioner, 116 T.C. 438, 446 (2001).  Petitioners failed to              
          report income, maintain adequate business records, or exercise              
          due care in reporting their income and expenses.  Accordingly, we           
          sustain respondent’s determinations.                                        
               Contentions we have not addressed are irrelevant, moot, or             
               To reflect the foregoing,                                              

                                                  Decision will be entered            
                                             under Rule 155.                          

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