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underpayment if any part of any underpayment in tax is due to
negligence or disregard of rules or regulations. Section
6653(a)(2) 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 disregard of rules or regulations.
Petitioners bear the burden of proof to show that any
underpayment was not due to negligence. Rule 142(a); Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972).
We have decided numerous Plastics Recycling cases and, to
date, have found the taxpayers liable for such additions to tax
in all but one of the opinions. See Friedman v. Commissioner,
T.C. Memo. 1996-558 and cases cited therein.
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 or her experience and the nature of the investment or
business. 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
they approached their investment. McPike v. Commissioner, T.C.
Memo. 1996-46. Compare Spears v. Commissioner, T.C. Memo. 1996-
341 with Zidanich v. Commissioner, T.C. Memo. 1995-382.
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