- 58 -
958, 992-993 (1989), affd. without published opinion 921 F.2d 280
(9th Cir. 1991); McCrary v. Commissioner, 92 T.C. 827 (1989);
Rybak v. Commissioner, 91 T.C. 524, 565 (1988). We conclude that
petitioners were negligent in claiming the deductions and credits
with respect to the Partnerships on their Federal income tax
returns for 1982. We hold, upon consideration of the entire
records, that petitioners are liable for the negligence additions
to tax under the provisions of section 6653(a)(1) and (2).
Respondent is sustained on this issue.
B. Section 6659 - Valuation Overstatement
In the notice of deficiency, respondent determined that
William and Joan Spears were liable for the section 6659 addition
to tax on the portion of their underpayment attributable to
valuation overstatement. Spears has the burden of proving that
respondent's determination is erroneous. Rule 142(a); Luman v.
Commissioner, 79 T.C. 846, 860-861 (1982).
In an amendment to answer, respondent asserted that Vincent
and Clotilde Farrell were liable for the section 6659 addition to
tax on the portion of their underpayment attributable to
valuation overstatement. Because this addition to tax was raised
for the first time in respondent's amendment to answer,
respondent bears the burden of proof on this issue. Rule 142(a);
Vecchio v. Commissioner, 103 T.C. 170, 196 (1994).
A graduated addition to tax is imposed when an individual
has an underpayment of tax that equals or exceeds $1,000 and "is
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