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b. we hold that Holdings is not entitled to claimed
deductions for professional and legal fees for its taxable years
ended 1988 and 1989;
c. we hold that Holdings is not entitled to deductions
claimed for employee training and recruiting for its taxable year
ended 1989;
d. we hold that Holdings is liable for the
environmental tax pursuant to section 59A.
G. Additions to Tax
Respondent determined in notices of deficiency that
petitioners are liable for (1) the additions to tax imposed by
section 6651(a)(1) for failure to file timely income or
withholding tax returns, (2) the additions to tax imposed by
section 6653(a) for negligence or disregard of rules or
regulations, (3) the additions to tax imposed by section 6655(a)
for failure to pay estimated tax, (4) the additions to tax
imposed by section 6656(a) for failure to make timely deposits of
taxes, and (5) the additions to tax imposed by section 6661(a)
for substantial understatement of income tax. We shall examine
the additions to tax separately.
1. Section 6651(a)(1)
Section 6651(a)(1) imposes an addition to tax for failure to
file timely a tax return unless it is shown that such failure is
due to reasonable cause and not willful neglect. A taxpayer can
establish reasonable cause by showing that, despite the exercise
of ordinary business care and prudence, the taxpayer was unable
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