                    UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT


                        _______________________

                              No. 00-60418
                         Civil Docket #4652-98
                        _______________________


DAN E. MARTENS; SUSAN J. MARTENS,

                                                 Petitioners-Appellants,

                                  versus

COMMISSIONER OF INTERNAL REVENUE,

                                                     Respondent-Appellee.


_________________________________________________________________

           Appeal from the United States District Court
                for the Northern District of Texas
_________________________________________________________________
                         February 21, 2001

Before REYNALDO G. GARZA, DAVIS, and JONES, Circuit Judges.

PER CURIAM *:

                 The court has carefully considered this appeal in

light of the Tax Court decision, the briefs, the facts, and oral

arguments of counsel.     Having done so, we are unable to find clear

factual error or any legal error in the Tax Court’s conclusion that

the loans to the Stork Shop, Inc. by the taxpayers became non-

business bad debts in 1993 and were thus nondeductible.           Garner v.


     *
            Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
Commissioner, 987 F.2d 267 (5th Cir. 1993). Further, the taxpayers

did not meet their burden of proving that their payment of the

Stork Shop’s debts in 1994 was an ordinary and necessary business

expense of the taxpayers.

           However, because of this court’s decision in Streber v.

Commissioner, 138 F.3d 216, 223 (5th Cir. 1998), the Tax Court

erred in assessing a substantial understatement penalty on the tax

liability for the erroneously deducted non-business bad debt.

Inasmuch as this determination turned on a question of fact (the

taxpayers’ motive), where there was evidence going both ways, and

a   multiplicity   of    authority   existed,     there    was   “substantial

authority”   for   the    taxpayers’       position.      See    26   U.S.C.   §

6662(d)(2)(B); Osteen v. Commissioner, 62 F.3d 356, 359 (11th Cir.

1995). But by the same token, taxpayers did not advance sufficient

evidence or authority to insulate from this penalty the attempted

1994 business expense deduction, which is accordingly affirmed.

           The judgment of the Tax Court is therefore affirmed as

modified to omit the substantial understatement penalty for the

1993 non-business bad debt.

           AFFIRMED as MODIFIED.




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