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to the Internal Revenue Service Center in Fresno, California.
The envelope containing petitioners' 1984 tax return was
postmarked August 13, 1985. The tax return was stamped
"received" by the Internal Revenue Service on August 19, 1985.
On the Schedule E attached to their 1984 Federal income tax
return, petitioners reported ordinary losses of $23,484 related
to the container leasing investment. In the notice of deficiency
respondent disallowed all losses claimed by petitioners regarding
Kathmar for 1983 and 1984, as well as all claimed ITC.
Petitioners are currently part of a pending class action
lawsuit against the promoters of GD&L. The primary claim of the
lawsuit is that the promotion was fraudulent and a sham.
OPINION
Petitioners contend that they reasonably relied on Lukensow
and the promotional materials when they invested in and claimed
deductions and credits attributable to the GD&L container leasing
program. Therefore, they assert that they are not liable for the
additions to tax and increased interest related thereto. To the
contrary, respondent contends that petitioners are liable for the
additions to tax pursuant to section 6653(a)(1) and (2), section
6661(a), and section 6651(a), and the increased interest pursuant
to section 6621(c).
Section 6653(a) Additions to Tax for Negligence
Section 6653(a) for 1980 and section 6653(a)(1) for 1981,
1983, and 1984 impose an addition to tax equal to 5 percent of
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