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Schedule E, they reported Mr. Robnett’s $69,521 distributive
share of Yuma Mesa’s loss, an $80 loss from another partnership,
and $3,200 of income from a third partnership. They also
reported on the return $2,538 in investment expenses and $13,196
in investment interest expenses.
After examining Yuma Mesa’s partnership return for taxable
year 1982, respondent disallowed the $1,298,031 deduction claimed
as research and development costs and increased the partnership’s
income by a total of $1,307,781. Respondent’s determinations
were upheld in their entirety by this Court. Respondent
subsequently determined that petitioners’ portion of the
partnership level adjustment resulted in a $21,404 deficiency.
Respondent issued petitioners a statutory notice of deficiency
determining additions to tax under sections 6653(a)(1),
6653(a)(2), and 6661, in the respective amounts of $1,070, 50
percent of the interest due on a $21,404 deficiency, and $5,351.
The first issue for decision is whether petitioners are
liable for additions to tax for negligence under section
6653(a)(1) and (2). Section 6653(a)(1) imposes an addition to
tax equal to 5 percent of the underpayment of tax if any part of
the underpayment is attributable to negligence or intentional
disregard of rules or regulations. Section 6653(a)(2) provides
for a further addition to tax equal to 50 percent of the interest
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