Robert E. and Carloyn S. Holmes - Page 42

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             therefore sustain respondent's adjustments to petitioners'               
             tax for the years in issue.                                              

             Additions to Tax for Negligence                                          
                  Respondent determined that petitioners are liable for               
             the additions to tax for negligence prescribed by section                
             6653(a)(1)(A) and (B) with respect to their 1987 return and              
             section 6653(a) with respect to their 1988 return.  Section              
             6653(a)(1)(A), in effect for 1987, and section 6653(a), in               
             effect for 1988, each imposed an addition to tax equal to                
             5 percent of an underpayment in tax if any part of such                  
             underpayment is due to negligence or disregard of rules or               
             regulations.  Section 6653(a)(1)(B), as in effect for 1987,              
             imposed an addition to tax equal to 50 percent of the                    
             interest payable on the portion of an underpayment which                 
             is attributable to negligence.                                           
                  Generally, negligence is defined as "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) (quoting Marcello                  
             v. Commissioner, 380 F.2d 499, 506 (5th Cir. 1967), affg.                
             in part and revg. in part 43 T.C. 168 (1964)).  Petitioners              









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