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addition to tax pursuant to section 6651(a)(1)1 in the amount of $337,264.
The issue in this case is whether petitioner, who relied on
his employee to file an application for an extension of time to
file his 1982 Federal income tax return, had reasonable cause for
not filing his return in a timely manner. We hold that
petitioner did not establish reasonable cause and that the
addition to tax for failure to file his return in a timely manner
should apply.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioner resided in Pelham Manor, New York, at the time he
filed his petition.
Petitioner was a founding and general partner of McMahan,
Brafman, Morgan & Co. (MBMC). MBMC, a broker-dealer in
Government securities and stock options, was organized as a
limited partnership. Prior to forming MBMC, petitioner conducted
various business enterprises. From 1966 to 1974, petitioner
invested on behalf of clients in the options and convertible bond
markets. He then became the National Institutional Options
Director for PaineWebber, Inc., and served in that capacity until
July of 1976. Following his tenure at PaineWebber, Inc., he was
hired as a partner at Bear, Stearns & Co. in New York. He
1All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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