- 26 -
failed to exercise due care in claiming tax benefits from that
investment. Their subjective intent does not excuse them from
the consequences of claiming deductions and credits to which
under the circumstances they were clearly not entitled. See
Klieger v. Commissioner, T.C. Memo. 1992-734.
We have considered and find unpersuasive petitioners'
arguments comparing this case with other cases that were resolved
in the taxpayers' favor with respect to the negligence addition
to tax.
The Gilmores, Wilson, and G&W failed to exercise due care in
claiming the deductions and tax credits relating to their
respective investments in Southeast. We find that they did not
reasonably rely upon Stewart or in good faith investigate the
aspect of the investment that generated the "attractive" tax
benefits--the value of the Sentinel recycler. Therefore, we hold
that these petitioners and the Hogards are liable for the
negligence additions to tax under the provisions of section
6653(a) for 1979 and 1980 and section 6653(a)(1) and (2) for
1981, 1982, and 1983.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011