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deficiency that determined an increase in taxable income as well
as an addition to tax under section 6651(a)(1). The amount of
the increase in taxable income was settled by a Stipulation of
Settlement dated October 18, 1994. This settlement increased
petitioner's taxable income by $1,536,047 and resulted in a
revised tax liability of $924,111.
The parties have stipulated that the amount of the addition
to tax under section 6651(a)(1), if it applies, is $141,028.
OPINION
Section 6651(a)(1) imposes an addition to tax for failure to
file an income tax return by the due date, including extensions,
unless it is shown that the failure is due to reasonable cause
and not due to willful neglect. A failure to file in a timely
manner is due to "reasonable cause" if the taxpayer exercised
"ordinary business care and prudence" and was nevertheless unable
to file the return within the time prescribed. Sec. 301.6651-
1(c)(1), Proced. & Admin. Regs. The burden of proof is on the
taxpayer. Rule 142(a); Ehrlich v. Commissioner, 31 T.C. 536, 540
(1958). The issue before this Court is whether petitioner's
reliance on his attorney to file an extension request constitutes
ordinary business care and prudence and thus reasonable cause.
I. Petitioner Relied on Mr. Russell To File
We must first determine whether petitioner relied on Mr.
Russell. We find that petitioner did so rely.
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