Marvin W. and Kathryn A. McPike - Page 10

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          the underpayment of tax if any part of the underpayment is due to           
          negligence or intentional disregard of the rules or regulations.            
          Section 6653(a)(2) for 1981, 1983, and 1984 imposes an addition             
          to tax in the amount of 50 percent of the interest due on the               
          portion of the underpayment attributable to negligence.                     
          Negligence is defined as the lack of due care or failure to do              
          what a reasonable and ordinarily prudent person would do under              
          the circumstances.  Neely v. Commissioner, 85 T.C. 934, 937                 
          (1985).  Respondent's determination that petitioners were                   
          negligent is presumed correct, and petitioners bear the burden of           
          proving that they were not negligent. Rule 142(a).                          
               In order to prevail on the negligence issue, petitioners               
          must prove that their actions in connection with the GD&L                   
          container investment were reasonable in light of their experience           
          and the nature of the investment.  See Henry Schwartz Corp. v.              
          Commissioner, 60 T.C. 728, 740 (1973).  Within this framework,              
          petitioners may prevail if they reasonably relied on competent              
          professional advice.  Freytag v. Commissioner, 89 T.C. 849, 888             
          (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S. 868             
          (1991).  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.  Maminga v. Commissioner, T.C.            
          Memo. 1995-361.                                                             
               Based on this record, we conclude that petitioners' reliance           




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