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OPINION
Issue 1. Negligence
Section 6653(a)(1) provides that if any part of an
underpayment of tax is the result of negligence or intentional
disregard of rules or regulations, 5 percent of the underpayment is
added to the tax. Section 6653(a)(2) imposes an addition to tax of
50 percent of the interest on the portion of the underpayment
attributable to negligence. Negligence is defined as the failure
to exercise the due care that a reasonable, prudent person would
exercise under similar circumstances. Zmuda v. Commissioner, 731
F.2d 1417, 1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982); Neely v.
Commissioner, 85 T.C. 934, 947 (1985). Respondent's determination
of negligence is presumed to be correct, and petitioner has the
burden of proving that it is erroneous. Rule 142(a); Luman v.
Commissioner, 79 T.C. 846, 860-861 (1982).
Reasonable reliance on the advice of experts can be sufficient
to avoid the negligence penalty. Ewing v. Commissioner, 91 T.C.
396, 423 (1988), affd. without published opinion and affd. without
published opinion sub nom. Czarneski v. Commissioner, 940 F.2d 1534
2(...continued)
applicability of the sec. 6621(c) increased rate of interest on
petitioners’ previously determined deficiencies for 1982 and 1983
is not a “deficiency” attributable to an affected item requiring
partner level determination, and thus is not one of the
adjustments in the notice of deficiency, we do not have
jurisdiction to consider (in the setting presented in this case)
whether petitioners are liable for additional interest. See
White v. Commissioner, 95 T.C. 209 (1990).
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Last modified: May 25, 2011