Esrig v. Comr., T.C. Memo. 2012-38

(petitioners (married couple) did not timely file returns from 1998 through 2003; upon filing returns, petitioners claimed large deductions including NOL carryovers, business losses and office expenses - including Sec. 179 deduction for fish tank and dining room furniture; IRS disallowed all losses and expenses for lack of substantiation and assessed additional tax and penalties; petitioners claimed they maintained adequate records but didn't produce any at trial; court failed to believe that petitioners were credible; penalties upheld - petitioners put blame on return preparer for late-filed returns due to preparer serving prison sentence for murdering spouse and person who took over for preparer made numerous mistakes, but court upheld penalties).