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such concession. For a detailed discussion of the facts and the
applicable law, see Provizer v. Commissioner, supra.
Issue 4. Sec. 6653(a) Negligence
In her first amendment to answer, respondent asserted that
petitioner was liable for the negligence-related additions to tax
under section 6653(a)(1) and (2) for 1981. Because these
additions to tax were raised for the first time in respondent's
amendment to answer, respondent bears the burden of proof on this
issue. Rule 142(a); Vecchio v. Commissioner, 103 T.C. 170, 196
(1994).
Section 6653(a)(1) provides for an addition to tax equal to
5 percent of the underpayment if any part of an underpayment of
tax is due to negligence or intentional disregard of rules or
regulations. In cases involving negligence, an additional amount
is added to the tax under section 6653(a)(2); such amount is
equal to 50 percent of the interest payable with respect to the
portion of the underpayment attributable to negligence.
Negligence is defined as the failure to exercise the due care
that a reasonable and ordinarily prudent person would employ
under the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). The question is whether a particular taxpayer's actions
in connection with the transactions were reasonable in light of
his experience and the nature of the investment or business. See
Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973).
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