- 32 -- 32 -
petitioners was liable for the additions to tax for negligence
under section 6653(a)(1) and (2) for 1982, and in the case of the
Gollins, under section 6653(a) for 1979 and 1980 as well.
Petitioners have the burden of proving that respondent's
determinations of these additions to tax are erroneous.9 Rule
142(a); Luman v. Commissioner, 79 T.C. 846, 860-861 (1982).
Section 6653(a) for 1979 and 1980 and section 6653(a)(1) for
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
9 In an amendment to the answer, respondent asserted that the
interest due from petitioner Fishbach under sec. 6653(a)(2) was
to be computed on an underpayment of $17,445 instead of $11,767.
However, by order dated Apr. 1, 1994, the burden of proof was
placed on petitioners Fishbach "with respect to the negligence
issues". The shifting of the burden of proof in respect of sec.
6653(a)(2) was ordered as a sanction under Rule 104(c).
Page: Previous 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 NextLast modified: May 25, 2011