Theodore A. Andros and Joan B. Andros - Page 57

                                        -57-                                          
              Section 6653(a) for 1976 and 1980 imposes an addition to tax            
         if any part of an underpayment of tax is due to negligence or                
         intentional disregard of rules or regulations.  Negligence is the            
         lack of due care or failure to do what a reasonable and ordinarily           
         prudent person would do under the circumstances.  Neely v.                   
         Commissioner, 85 T.C. 934, 947 (1985).                                       
              Based upon the record before us, we conclude that respondent            
         has not satisfied her burden of proof on this issue.  Thus,                  
         petitioners are not liable for the section 6653(a) additions to tax          
         for 1976 and 1980.                                                           
         Issue 3.  Section 6621(c) Additional Interest                                
              The third issue is whether petitioners are liable for                   
         additional interest for 1976 and 1980.  Respondent determined that           
         petitioners are liable for the increased rate of interest provided           
         in section 6621(c) (formerly section 6621(d)).  Respondent has the           
         burden of proof on this issue with regard to 1976 (because it is a           
         new matter raised in respondent’s amended answer) and petitioners            
         have the burden of proof with regard to 1980.                                
              Section 6621(c) provides for an interest rate on substantial            
         underpayments attributable to tax-motivated transactions that is             
         120 percent of the underpayment rate provided in section 6601. See           
         Stanley Works & Subs. v. Commissioner, 87 T.C. 389, 413-415 (1986).          
         Section 6621(c) applies to interest accrued after December 31, 1984,         
         even though the transaction was entered into prior to the date of            
         enactment of section 6621(c). Solowiejczyk v. Commissioner, 85 T.C.          




Page:  Previous  47  48  49  50  51  52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  Next

Last modified: May 25, 2011