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to believe that he had rolled over his pension distribution into
an IRA. Mr. Supinski had attempted to direct petitioner to
financial products on which Mr. Supinski would have earned
commissions. Petitioner believed that he could individually
place his funds in an investment of his choice because he had
already opened an IRA account. While this did not win the day as
to petitioners' tax liability argument, we hold that petitioners
are not liable for the negligence addition for the portion of the
funds that remained deposited in petitioner's credit union
accounts as of the end of 1990.
With respect to the $7,005.77 initially withheld from
deposit, the $50,000 withdrawn by petitioners to build a home,
and the unreported income in the amounts of $1,971 and $18,
petitioners did not provide any explanation that would mitigate
respondent's determination of negligence under section 6662(a).
Accordingly, we hold that petitioners are liable for the 20-
percent penalty as to that part of the underpayment which is
attributable to the $50,000, $7,005.77, $1,971, and $18 omitted
amounts.
To reflect the foregoing,
Decision will be entered under
Rule 155.
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Last modified: May 25, 2011