- 18 - 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 ofPage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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