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Petitioners alternatively argue that the third protocol,
i.e., the amendment to the U.S.-Canada Treaty that was signed on
August 31, 1994, contains language against double taxation
similar to the U.S.-Canada Treaty in effect during 1987. As a
later expression of the sovereign will, petitioners argue that
the third protocol overrides section 59(a)(2). However, the
third protocol has not been ratified by the United States and
Canada and is, therefore, not effective. Moreover, the protocol
provides generally that, upon the exchange of the instruments of
ratification, the protocol will be effective on a prospective
basis, rather than retroactively. Accordingly, in petitioners'
case, section 59(a)(2) remains the last expression of the
sovereign will. Respondent, therefore, is sustained on this
issue.
Section 6651(a)(1) provides an addition to tax for the
failure to file a timely income tax return, unless the failure to
timely file is due to reasonable cause and not due to willful
neglect. Section 6653(a)(1) provides an addition to tax if any
part of the underpayment of tax is due to negligence or
intentional disregard of rules or regulations. Negligence has
been defined as a lack of due care or the failure to do what a
reasonable and ordinarily prudent person would do under the
circumstances. Marcello v. Commissioner, 380 F.2d 499 (5th Cir.
1967), affg. in part and revg. in part T.C. Memo. 1964-299.
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