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were for services rendered, although Cramer noted that Henry had
not yet accomplished anything of substance at the time of the
grant.
OPINION
Petitioners concede that they are liable for the underlying
income tax deficiency but contend that they are not liable for
the additions to tax. In that regard, petitioners bear the
burden of proof with respect to the additions to tax. Rule
142(a); Luman v. Commissioner, 79 T.C. 846, 860-861 (1982).
Respondent argues that petitioners were negligent inasmuch
as they knew that: (1) When granted, the options did not have
readily ascertainable fair market values; (2) the options did not
have fair market values of zero at the time they filed their
section 83(b) elections; and (3) at the time the 1982 Federal
income tax returns were filed, their positions were subject to
challenge. Petitioners, on the other hand, contend that they did
not misrepresent the sale of the options, relied on professional
advisers, and acted in good faith in reporting the sales of the
options. The success of petitioners' contentions is dependent in
part on their claim that they were unaware of the concerns of
other top echelon officers of IMED, even though Henry was a
director and part of that group.
For 1982, section 6653(a)(1) provides for an addition to tax
equal to 5 percent of the underpayment in tax if any part of the
underpayment is due to negligence or intentional disregard of
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