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Commissioner, 102 T.C. 596, 612 (1994).
Section 6653(a) for 1979 and section 6653(a)(1) for 1981 and
1982 impose an addition to tax equal to 5 percent of the
underpayment if any part of an underpayment of tax is due to
negligence or intentional disregard of rules or regulations.
Section 6653(a)(2) imposes an addition to tax equal to 50 percent
of the interest payable with respect to the portion of the
underpayment attributable to negligence or intentional disregard
of rules or regulations.
Negligence is defined as the failure to exercise the due
care that a reasonable and ordinarily prudent person would employ
under the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). The question is whether a particular taxpayer's actions
in connection with the transactions were reasonable in light of
his experience and the nature of the investment or business. See
Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973).
When considering the negligence addition to tax, we evaluate the
particular facts of each case, judging the relative
sophistication of the taxpayers, as well as the manner in which
they approached their investment. McPike v. Commissioner, T.C.
Memo. 1996-46. Compare Spears v. Commissioner, T.C. Memo. 1996-
341, with Zidanich v. Commissioner, T.C. Memo. 1995-382.
In the present case, petitioner contends that he reasonably
relied upon the advice of a qualified adviser, Stuart Becker. A
taxpayer may avoid liability for the additions to tax under the
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