T.C. Summary Opinion 2020-1



                           UNITED STATES TAX COURT



          JANET MIOKO STOVALL AND DAVID DUNSON, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 16116-17S.                           Filed January 6, 2020.



      Janet Mioko Stovall and David Dunson, pro sese.

      Charles A. S. Wiseman, for respondent.



                                SUMMARY OPINION


      PANUTHOS, Special Trial Judge: This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect when the

petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not


      1
          Unless otherwise indicated, subsequent section references are to the
                                                                        (continued...)
                                         -2-

reviewable by any other court, and this opinion shall not be treated as precedent

for any other case.

      In a notice of deficiency dated May 1, 2017, respondent determined the

following deficiencies and penalties:

                                                  Penalty
                      Year    Deficiency        sec. 6662(a)
                      2014     $14,775              $2,955
                      2015      40,425               8,085

      Petitioners concede that they received and did not report the following

income items for tax year 2014: (1) cancellation of debt income of $18,163,2

(2) cancellation of debt income as a result of forgiven interest of $800, and (3) an

individual retirement account distribution of $140. Petitioners further concede the

following deductions claimed on their 2014 tax return: (1) student loan interest of

$295, (2) deductions claimed on Schedule A, Itemized Deductions, of $4,929, and



      1
       (...continued)
Internal Revenue Code (Code) in effect for the years in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure. Amounts are
rounded to the nearest dollar.
      2
        The notice of deficiency determined that petitioners failed to report
cancellation of debt income of $18,239. Third parties reported to respondent that
petitioners received cancellation of debt income of $18,163. Respondent concedes
the balance of the adjustment of $76.
                                         -3-

(3) a deduction claimed on Schedule C, Profit or Loss From Business, other

expenses for “Start Up” of $2,300. For tax year 2015, petitioners concede that

they received and failed to report income from State refunds, credits, or offsets of

$8,797. They further concede the following deductions claimed on their 2015 tax

return: (1) student loan interest of $1,963, (2) Schedule A deductions of $2,443,

(3) Schedule C legal and professional services expenses of $960, (4) Schedule C

contract labor expenses of $600, (5) Schedule C commissions and fees expenses of

$1,250, and (6) Schedule C advertising expenses of $7,577.

      The notice of deficiency determined that petitioners failed to report

gambling income of $25,250 for tax year 2015. Respondent concedes that

petitioners had gambling losses in excess of the amount of their gambling

winnings in that year. As a result, petitioners are entitled to an additional

miscellaneous itemized deduction not subject to the 2% percent floor up to the

amount of their gambling income for tax year 2015.

      After concessions, the issues for decision are whether petitioners are:

(1) entitled to deduct Schedule C expenses for tax years 2014 and 2015 and

(2) liable for accuracy-related penalties under section 6662(a) for tax years 2014

and 2015 for underpayments due to substantial understatements of income tax

and/or negligence.
                                         -4-

                                     Background

      Some of the facts have been stipulated and are so found. Petitioners are

married and resided in North Carolina when the petition was timely filed.

I.    Petitioners’ Business Activity and Employment

      Janet Mioko Stovall and David L. Dunson have been married since 2007

and have six children. In tax years 2014 and 2015 Mr. Dunson worked for FedEx

Freight, Inc. Ms. Stovall has been a nurse since 1993. She first obtained a

bachelor’s degree and later received a master’s degree in business and a master’s

degree in health administration. Over the course of her career Ms. Stovall has

worked for multiple healthcare companies, including 10 years at Kaiser

Permanente, where she eventually became a nurse executive.

      During the tax years in issue Ms. Stovall worked as a nurse executive for

B.E. Smith Interim Services, Inc. (B.E. Smith), headquartered in Lenexa,

Kentucky. B.E. Smith provides interim and permanent healthcare executives to

healthcare facilities with vacancies. B.E. Smith paid her wages of $152,821 in

2014 and $103,207 in 2015.

      While working for B.E. Smith, Ms. Stovall recognized a need in the

healthcare industry for hospital personnel to fill hospital facility vacancies. To fill

this need petitioners began operating a business known as Nursing Leadership
                                        -5-

Consulting, LLC (NLC), in 2014. NLC was organized to assist medical

organizations and institutions in short-term personnel placement. Mr. Dunson was

NLC’s chief executive officer. His duties included writing and executing business

contracts. Ms. Stovall was a consulting executive nurse, fulfilling some of NLC’s

staffing contracts.

      Although petitioners eventually incorporated NLC and began issuing

Forms 1099-MISC, Miscellaneous Income, to its workers, Ms. Stovall did not

educate herself on business operations and recordkeeping software for the tax

years in issue.

II.   Petitioners’ Personal and Business Residences

      Petitioners owned a home in Winston-Salem, North Carolina, during the

years in issue. Petitioners also rented or owned multiple residences that had some

relationship to the business activity of NLC. NLC provided housing for some of

the hospital employees placed in temporary positions. In April 2015 petitioners

took out a “wrap” loan for a house in Georgia (Georgia residence). A wrap loan is

a financing agreement in which the buyer pays interest to the seller in advance of a

later principal payment to finalize the purchase. The Georgia residence was used

as housing for travel nurses that NLC placed at hospitals in the Atlanta

metropolitan region. The 11,000-square-foot house had nine bedrooms, eight
                                         -6-

bathrooms, and a pool. The sale of the Georgia residence fell through in the fall of

2015, and petitioners entered into a second wrap loan financing transaction for a

replacement home (second Georgia residence) on the same street in November

2015.

        Ms. Stovall also rented a studio apartment in Folsom, California, while

working on nursing contracts within driving distance of the apartment. She paid

approximately $1,300 in rent per month to Folsom Ranch Apartments during

2015. Although there was some vague reference to one additional NLC rental

property held in 2015, reliable evidence of expenses related to that property was

not included in the record.

III.    Petitioners’ Tax Returns and Respondent’s Adjustments

        Petitioners jointly filed Form 1040, U.S. Individual Income Tax Return, for

each tax year in issue. Petitioners did not hire a tax return preparer to assist with

their tax return preparation and filing. Respondent determined that petitioners

failed to substantiate certain reported Schedule C expenses related to NLC for

both tax years.

        Petitioners timely filed their Federal income tax return for 2014, reporting

their address as that of the Georgia residence. Petitioners reported $192,908 in

wage income. On Schedule A for 2014 they reported $72,909 in itemized
                                        -7-

deductions. They reported $22,663 in unreimbursed employee expenses,

consisting of $6,496 in vehicle expenses, $5,400 in travel expenses, $9,650 in

other business expenses, and $1,117 in meals and entertainment expenses. The

notice of deficiency disallowed Schedule A deductions of $4,929 for 2014.

      Petitioners also reported $1,400 in gross receipts and $23,422 in expenses

related to NLC for 2014. On the Schedule C, petitioners listed their business

address as the Georgia residence. Respondent disallowed deductions for $20,967

in Schedule C expenses for 2014, including $18,667 in car and truck expenses.

      Petitioners timely filed their Federal income tax return for 2015 listing their

home address as that of Ms. Stovall’s apartment in Folsom, California. Petitioners

reported $146,938 in wage income. They also reported $76,074 in gross receipts

and $125,082 of expenses on Schedule C. They listed the business address of the

Schedule C business as the second Georgia residence. Respondent disallowed

deductions of $88,937 in Schedule C expenses as claimed on petitioners’ return

for tax year 2015, including the following Schedule C expenses in issue:
                                       -8-

                         Expense                      Amount
             Utilities                                $19,946
             Travel                                    23,603
             Interest--mortgage                        35,000
               Total                                   78,549

      Ms. Stovall also reported and respondent allowed $6,775 in unreimbursed

employee expenses for 2015, consisting of $3,100 in travel expenses away from

home, $3,425 in other business expenses, and $250 in meals and entertainment

expenses.

                                    Discussion

I.    Burden of Proof

      Generally, the Commissioner’s determination set forth in a notice of

deficiency is presumed correct, and the taxpayers bear the burden of proving that

the determination is in error. Rule 142(a); Welch v. Helvering, 

, 115

(1933). Pursuant to section 7491(a), the burden of proof as to factual matters

shifts to the Commissioner under certain circumstances. Petitioners have not

asserted or otherwise shown that section 7491(a) applies. See sec. 7491(a)(2)(A)

and (B). Therefore, petitioners bear the burden of proof.
                                       -9-

II.   Petitioners’ Schedule C Expense Deductions

      Deductions are a matter of legislative grace, and the taxpayers generally

bear the burden of proving they are entitled to any deduction claimed.

Rule 142(a); INDOPCO, Inc. v. Commissioner, 

, 84 (1992); New

Colonial Ice Co. v. Helvering, 

, 440 (1934). Taxpayers claiming a

deduction on a Federal income tax return must demonstrate that the deduction is

allowable pursuant to some statutory provision and must further substantiate that

the expense to which the deduction relates has been paid or incurred. See sec.

6001; Hradesky v. Commissioner, 

, 89-90 (1975), aff’d per curiam, 

(5th Cir. 1976); Meneguzzo v. Commissioner, 

, 831-832

(1965); sec. 1.6001-1(a), Income Tax Regs.

      Taxpayers may deduct ordinary and necessary expenses paid in connection

with operating a trade or business. Sec. 162(a); Boyd v. Commissioner, 

, 313 (2004). Generally, no deduction is allowed for personal, living, or family

expenses. See sec. 262(a). Taxpayers must show that any deducted expenses were

incurred primarily for business rather than personal reasons. See Rule 142(a);

Walliser v. Commissioner, 

, 437 (1979). A proximate relationship

between each deducted expense and the business is required. See Walliser v.

Commissioner, 

.
                                        - 10 -

      Taxpayers are required to maintain records sufficient to substantiate

expenses underlying deductions claimed on their return. Sec. 6001; sec.

1.6001-1(a), (e), Income Tax Regs.; see New Colonial Ice Co. v. 

. If the taxpayers are able to establish that they paid or incurred a

deductible expense but are unable to substantiate the precise amount, the Court

generally may approximate the deductible amount, but only if the taxpayers

present sufficient evidence to establish a rational basis for making the estimate.

See Cohan v. Commissioner, 

, 543-544 (2d Cir. 1930); see also

Vanicek v. Commissioner, 

, 742-743 (1985). The failure to keep and

produce appropriate records counts heavily against the taxpayers’ attempted proof.

Rogers v. Commissioner, T.C. Memo. 2014-141, at *17.

      Section 274(d) imposes stricter substantiation requirements for certain kinds

of expenses otherwise deductible under section 162(a). No deduction is allowed

for travel expenses, gifts, meals, and entertainment, or for listed property as

defined by section 280F(d)(4), unless the taxpayers substantiate by adequate

records or corroborate by sufficient evidence the taxpayers’ own statements as to:

(1) the amount of the expense, (2) the time and place the expense was incurred,

(3) the business purpose of the expense, and (4) the recipient’s business

relationship for each expenditure. Sec. 274(d); sec. 1.274-5T(a), (b), and (c),
                                        - 11 -

Temporary Income Tax Regs., 50 Fed. Reg. 46014, 46016 (Nov. 6, 1985). Section

274(d) substantiation requirements supersede the Cohan test. See Sanford v.

Commissioner, 

, 827-828 (1968), aff’d per curiam, 

(2d

Cir. 1969); sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014

(Nov. 6, 1985).

      Substantiation by adequate records requires the taxpayers to maintain an

account book, a diary, a log, a statement of expense, trip sheets, or a similar record

prepared contemporaneously with the expenditure and documentary evidence

(e.g., receipts or paid bills) of certain expenditures. Sec. 1.274-5(c)(2)(iii), Income

Tax Regs.; sec. 1.274-5T(c)(2), Temporary Income Tax Regs., 50 Fed. Reg. 46017

(Nov. 6, 1985). Substantiation by other sufficient evidence requires the

production of corroborative evidence in support of the taxpayers’ statement

specifically detailing the required elements. Sec. 1.274-5T(c)(3), Temporary

Income Tax Regs., 50 Fed. Reg. 46020 (Nov. 6, 1985).

      Respondent asserts that petitioners have not shown a business purpose for

certain expenses and have failed to show that other expenses were actually

incurred. In addition, respondent asserts that they submitted evidence for

expenses that respondent may have already allowed as unreimbursed employee

expenses for each tax year.
                                       - 12 -

      A.    Car and Truck Expenses--2014

      Ms. Stovall claimed a deduction for car and truck expenses on the 2014

Schedule C. Respondent disallowed deductions for $18,667 of these car and truck

expenses.

      Ms. Stovall provided a mileage log to support the claimed car and truck

expense deduction. Her mileage log shows 14,360 miles driven for business

purposes during 2014 and an additional $4,442 in gas, repairs, and other vehicle

costs. Most of the entries on the mileage log show five-mile trips that appear to be

commuting trips between her rental apartment in California and her workplace. In

general, expenses of daily commuting are not deductible because they constitute

personal expenses. See sec. 1.262-1(b)(5), Income Tax Regs.; see also

sec. 1.162-2(e), Income Tax Regs. Although there are exceptions to this general

rule, see, e.g., Rehman v. Commissioner, T.C. Memo. 2013-71, at *13-*14

(commuting expenses may be deductible where a taxpayer’s residence is her

principal place of business or where she is commuting between her principal place

of business and another place of business), a taxpayer typically bears the burden of

proving that an exception exists permitting the deduction of commuting expenses.

Ms. Stovall did not allege that any such exception applies, and the record does not

support a finding sufficient to invoke any such exception.
                                       - 13 -

      The remaining mileage log entries consist of: (1) a cross-country trip from

North Carolina to California totaling 2,681 miles on January 13, 2014, (2) a

second cross-country trip from North Carolina to California on January 24, 2014,

also totaling 2,681 miles, (3) a business seminar in Anaheim, California, from

January 25 through January 27, 2014, showing exactly 433 miles driven each way,

(4) a trip to a casino for a slot tournament from February 1 to February 3, 2014,

indicating mileage of exactly 579 miles each way, (5) a conference and business

dinner in Reno/Lake Tahoe from February 8 to February 9, 2014, totaling 249

miles, and (6) a “nurse pickup” logged as 2,688 miles from “home” to “work” at

some point in June 2014, followed by a “nurse return” trip from “work” to “home”

also totaling 2,688 miles on July 4, 2014.

      On the basis of the Court’s examination of the mileage log it does not

appear to have been created contemporaneously with the claimed trips. The

mileage listed for the outbound leg of each of multiple trips exactly matches that

of each inbound leg. Further, a number of the trips could not have occurred in a

single day as shown on the mileage log. Additionally, Ms. Stovall has not

provided sufficient evidence regarding the business purpose of each trip shown.

Thus, she did not establish that these expenditures constitute ordinary and
                                        - 14 -

necessary business expenses, nor did she satisfy the substantiation requirements of

section 274(d).

      Ms. Stovall also provided an invoice for collision and glass repairs of $500

on April 16, 2015, and a carbon copy of a check made out to Caliber Collision for

$1,094 on April 29, 2015. These expenses were not incurred in the 2014 tax year,

and she did not offer testimony or otherwise establish that the expenses were

related to her business. Thus, she did not satisfy the substantiation requirements

of section 274(d) (or the requirements of section 162(a)) with respect to the

claimed 2014 car and truck expense deduction. Respondent’s disallowance of the

deduction is sustained.

      B.     Utilities and Mortgage Interest Expenses--2015

      Petitioners claimed two expense deductions related to the business use of

the NLC residences during tax year 2015: (1) utilities totaling $19,946 and

(2) home mortgage interest totaling $35,000. Taxpayers may deduct expenses

related to the business use of a home, including utilities and home mortgage

interest, if a portion of the residence is regularly and exclusively used as the

principal place of business for any of the taxpayers’ trades or businesses.

Sec. 280A(c)(1)(A).
                                        - 15 -

      Respondent has not questioned whether petitioners were engaged in an

active trade or business through NLC in 2015. Ms. Stovall claims that 100% of

the Georgia residence was used regularly and exclusively as a principal place of

business for NLC in 2015. Petitioners reported the address of their second

Georgia residence as their business address for NLC on the 2015 Schedule C.

Ms. Stovall also testified that during 2015 petitioners’ primary residence was in

North Carolina and that Mr. Dunson ran NLC from home while caring for their six

children.

      Ms. Stovall testified that a portion of the claimed utilities expenses was for

her apartment in Folsom, California. She testified that the utilities were included

in rent and that they were approximately $100 per month. She later contradicted

this testimony by asserting that a photocopy of a carbon copy of a check in the

record showing $1,386 paid to Folsom Ranch Apartments on July 1, 2015, was

only for rent and did not include utilities. Because she was unable to present

additional evidence regarding her utilities expenses in Folsom, she did not

establish a rational basis for estimating those expenses.

      To substantiate most of the claimed utilities expenses, Ms. Stovall has

provided documentation related to the Georgia residence for 2015 as well as a

number of receipts that do not relate to that year. She has provided a billing and
                                       - 16 -

payment history from Southern Co. showing that she paid approximately $3,768 in

utilities expenses from March through December 2015. She has also submitted

photocopies of carbon copies of three checks to Georgia Power for $1,276 on

February 14, 2015, $680 on April 11, 2015, and $1,091 on September 23, 2015.

Notes on the carbon copies indicate that they were paid in relation to registered

nurse housing in Georgia. Petitioners also paid $636 ($53 per month) on a home

warranty plan related to the Georgia residence. Ms. Stovall has also proffered a

water bill dated April 19, 2015, from Henry County Water Co. for the Georgia

residence showing an amount due of $577, and a receipt from New Heights

Heating and Air Conditioning in Stone Mountain, Georgia, showing $545 paid by

Ms. Stovall at the Georgia address for services rendered on January 18, 2015.

Petitioners presented evidence of both pool and landscaping services rendered at

the Georgia residence but did not supply evidence or testimony regarding any

business purpose for pool and landscaping expenses.

      We are satisfied that petitioners incurred $8,573 in utilities expenses related

to the Georgia residence in 2015 and that the payments were ordinary and

necessary business expenses of NLC. The Court sustains respondent’s

disallowance of a deduction for the utilities expenses to the extent they exceed

$8,573.
                                        - 17 -

      With regard to reported home interest mortgage expenses, Ms. Stovall has

submitted a mortgage interest statement from 2014 for $2,224, a cashier’s check

related to the Georgia residence for $15,000 dated November 3, 2014, and two

Bank of America transfer confirmations showing payments of $20,000 on

November 25, 2014, and $9,620 on November 28, 2014. None of the home

interest mortgage documents pertain to tax year 2015. Therefore the Court

sustains respondent’s disallowance of the home mortgage interest expense

deduction for 2015.

      C.     Travel Expenses--2015

      Ms. Stovall testified that she traveled to various locations for her work as a

contract nurse executive through NLC in 2015, incurring $23,603 in travel

expenses. Travel expenses are subject to the strict substantiation requirements of

section 274(d).

      Ms. Stovall presented some evidence related to her travel expenses,

consisting of a variety of hotel receipts, rental car invoices, and photocopies of

carbon copies of checks. She did not, however, provide sufficient evidence to

prove that these trips were made in connection with NLC. Respondent allowed

petitioners to deduct $3,100 in unreimbursed employee expenses related to travel

in 2015, and they have not proven that the travel expenses reported on Schedule C
                                        - 18 -

do not duplicate reported unreimbursed employee expenses. Further, some of

petitioner’s receipts indicate that the travel expenses may have been incurred for

personal reasons in addition to or in place of a business purpose. For example, an

invoice for a stay at Home2Suites by Hilton in D’Iberville, Mississippi, indicates

that Ms. Stovall paid a pet fee of $75 for her room. Another invoice from the

DoubleTree by Hilton in Breckenridge, Colorado, indicates that two adults

occupied a room from March 13 to March 14, 2015. For these reasons, she has not

satisfied the substantiation requirements of section 274(d) in relation to any of her

travel expenses. The Court sustains respondent’s disallowance of the claimed

travel expense deduction for tax year 2015.

III.   Accuracy-Related Penalty

       Respondent determined that petitioners are liable for an accuracy-related

penalty for each year in issue. Section 6662(a) and (b)(1) and (2) imposes a 20%

accuracy-related penalty on any portion of an underpayment of Federal income tax

that is attributable to the taxpayer’s “[n]egligence or disregard of rules or

regulations” or “substantial understatement of income tax.”

       An understatement of Federal income tax is substantial if the amount of the

understatement for the taxable year exceeds the greater of 10% of the tax required

to be shown on the return or $5,000. Sec. 6662(d)(1)(A).
                                       - 19 -

      “Negligence” includes any failure to make a reasonable attempt to comply

with the Code and any failure to keep adequate books and records or to

substantiate items properly. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs.

Negligence has also been defined as the failure to exercise due care or the failure

to do what a reasonable person would do under the circumstances. See Allen v.

Commissioner, 

, 12 (1989), aff’d, 

(9th Cir. 1991). The

term “disregard” includes any careless, reckless, or intentional disregard.

Sec. 6662(c). Disregard of rules or regulations is “careless” if the taxpayer does

not exercise reasonable diligence in determining the correctness of a return

position that is contrary to a rule or regulation. Sec. 1.6662-3(b)(2), Income Tax

Regs. Disregard is “reckless” if the taxpayer makes little or no effort to determine

whether a rule or regulation exists, under circumstances which demonstrate a

substantial deviation from the standard of conduct that a reasonable person would

observe. 

“intentional” if the taxpayer knows of the rule or

regulation that is disregarded. 

bears the burden of production with respect to a section

6662 penalty. Sec. 7491(c).3 In order to meet this burden the Commissioner need

      3
       The Commissioner’s burden of production for penalties imposed under sec.
6662 includes the burden of producing evidence establishing that the penalties
                                                                     (continued...)
                                       - 20 -

only make a prima facie case that imposition of the penalty is appropriate. Higbee

v. Commissioner, 

, 446 (2001). If the understatement of income tax

for the year in issue is substantial, the Commissioner has satisfied the burden of

producing evidence that the penalty is justified. On the basis of the conceded

items and the conclusions of the Court, respondent met this burden because the

amount of petitioners’ understatement for each of 2014 and 2015 is substantial.

      Once the Commissioner has met his burden, the taxpayer may avoid a

section 6662(a) accuracy-related penalty to the extent he or she can demonstrate

(1) reasonable cause for the underpayment and (2) that he or she acted in good

faith with respect to the amount paid. Sec. 6664(c)(1). The decision as to whether

a taxpayer acted with reasonable cause and in good faith is made on a case-by-case

basis, taking into account all pertinent facts and circumstances, including: (1) the


      3
        (...continued)
were “personally approved (in writing) by the immediate supervisor of the
individual making such determination” as required by sec. 6751(b)(1), unless a
statutory exception applies. See Chai v. Commissioner, 

, 217-218,
221-222 (2d Cir. 2017), aff’g in part, rev’g in part T.C. Memo. 2015-42; Graev v.
Commissioner, 

(2017), supplementing and overruling in part 

(2016). Written approval of the initial penalty determination under
sec. 6751(b)(1) must be obtained before the first formal communication of
penalties. Clay v. Commissioner, 

, 249 (2019). The sec. 6662
accuracy-related penalties determined in the notice of deficiency were properly
approved as required by sec. 6751(b), and respondent has proven sufficient facts
to satisfy the burden of production as to that issue.
                                         - 21 -

taxpayer’s efforts to assess the proper tax liability, (2) the knowledge and

experience of the taxpayer, and (3) reliance on the advice of a tax professional.

Sec. 1.6664-4(b)(1), Income Tax Regs. An honest misunderstanding of the law

that is reasonable in the light of the facts and circumstances may support a

conclusion that a taxpayer acted with reasonable cause and in good faith with

respect to a reported position. Id.; see Higbee v. Commissioner, 

-

449. Generally, the most important factor is the extent of the taxpayer’s efforts to

assess his or her proper tax liability. Sec. 1.6664-4(b)(1), Income Tax Regs.

Statutory complexity alone does not constitute reasonable cause. Barnes v.

Commissioner, T.C. Memo. 2012-80, 

, at *15, aff’d, 

(D.C. Cir. 2013).

      Petitioners omitted substantial amounts of income for the years in issue and

failed to adequately support claimed deductions. There is no doubt that

petitioners’ recordkeeping was poor to nonexistent. They made little if any effort

to keep adequate records after starting a Schedule C business activity. Petitioners

failed to establish reasonable cause for the positions taken on the joint tax returns.

Nor did they make a reasonable, good-faith effort to correctly assess their tax

liabilities. There is no evidence in the record that petitioners relied on a tax

professional in preparing their tax returns for the years in issue. On the basis of
                                       - 22 -

our findings, respondent’s determination as to the applicability of the accuracy-

related penalties is sustained to the extent of the underpayments decided for tax

years 2014 and 2015.

      We have considered all of petitioners’ arguments, and, to the extent not

addressed herein, we conclude that they are moot, irrelevant, or without merit.

      To reflect the foregoing,


                                                Decision will be entered under

                                       Rule 155.