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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
meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: March 27, 2008