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petitioner bears the burden of proof with respect to the
additions to tax under section 6653(a) and the increased interest
under section 6621(c). Rule 142(a); Luman v. Commissioner, 79
T.C. 846, 860-861 (1982). Respondent raised the section 6661
addition to tax by affirmative allegation in the answer and,
accordingly, bears the burden of proof with respect to that item.
Rule 142(a); Vecchio v. Commissioner, 103 T.C. 170, 196 (1994).
For 1980, section 6653(a), and for the 1981 through 1983 tax
years, section 6653(a)(1) impose an addition to tax equal to 5
percent of the underpayment if any part of an underpayment of tax
is due to negligence or intentional disregard of rules or
regulations. Section 6653(a)(2) for 1981, 1982, and 1983 imposes
an addition to tax equal to 50 percent of the interest payable
with respect to the portion of the underpayment attributable to
negligence or intentional disregard of rules or regulations.
Negligence is defined as the failure to exercise the due
care that a reasonable and ordinarily prudent person would employ
under the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). The question is whether a particular taxpayer's actions
in connection with the transactions were reasonable in light of
his experience and the nature of the investment or business. See
Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973).
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
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