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respondent. Although the underlying transaction in the instant
case is essentially identical to the transaction considered in
the test case, petitioners maintain that their case is factually
different from the test case. After concessions, however, the
sole issue for our determination is whether petitioners are
liable for the additions to tax for negligence under section
6653(a)(1) and (2) for taxable year 1984.
Section 6653(a)(1) provides for an addition to tax equal to
5 percent of any underpayment if any part of the underpayment is
due to negligence or intentional disregard of rules or
regulations. Section 6653(a)(2) provides for an addition to tax
of 50 percent of the interest on that portion of the underpayment
attributable to negligence. Negligence is defined as a lack of
due care or the failure to act as a reasonable person would act
under similar circumstances. Chamberlain v. Commissioner, 66
F.3d 729, 732 (5th Cir. 1995), affg. in part and revg. in part
T.C. Memo. 1994-228; Heasley v. Commissioner, 902 F.2d 380, 383
(5th Cir. 1990), revg. T.C. Memo. 1988-408; Neely v.
Commissioner, 85 T.C. 934, 947 (1985). Petitioners bear the
burden of proving that no part of the underpayment for the year
at issue is due to negligence or intentional disregard of rules
or regulations. Rule 142(a); Bixby v. Commissioner, 58 T.C. 757
(1972). The negligence addition under section 6653 is correctly
assessed in cases where claimed deductions are not supported by
the facts. Sandvall v. Commissioner, 898 F.2d 455 (5th Cir.
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