-51-
We conclude that petitioner did not accumulate earnings and
profits beyond its reasonable business needs. We concluded above
that petitioner was not formed or availed of to avoid income tax
on its shareholders. See paragraph II-B-3. Either conclusion
would justify our finding that the accumulated earnings tax does
not apply. See Technalysis Corp. v. Commissioner, 101 T.C. 397
(1993). Thus, we hold that the accumulated earnings tax does not
apply.
E. Environmental Tax
Respondent determined that petitioner was liable for the
environmental tax under section 59A in the amount of $1,177 for
the 1988 fiscal year. Petitioner had the burden of proof, but
presented no evidence or argument on this issue. Respondent
states that this issue is computational. The parties should
resolve the amount petitioner owes in the Rule 155 computation.
F. Negligence
Respondent determined that petitioner is liable for
additions to tax for negligence for each of the years in issue.
Negligence is 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, 947 (1985) (citing Marcello
v. Commissioner, 380 F.2d 499, 506 (5th Cir. 1967), affg. in part
and remanding in part 43 T.C. 168 (1964)). Under section
6653(a)(1)(A) and (B) for fiscal years 1987 and 1988, and section
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