-5-
of rules or regulations. Section 6653(a)(2) imposes an addition
to tax in an amount equal to 50 percent of the interest due on
the portion of the underpayment attributable to negligence.
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). Thus, to avoid imposition of the addition to
tax, petitioner must prove that her actions in connection with
the loss from the Barbados venture were reasonable in light of
her experience and the nature of the investment. See Henry
Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973); Lucas v.
Commissioner, T.C. Memo. 1995-341.
Petitioner offered very little evidence to refute
respondent's determination of negligence. The only evidence in
the record regarding petitioner's evaluation of the investment
consists of her testimony that she read certain "documents" and
that she relied on the recommendation of Mr. Maerki. No
prospectus or offering memorandum was introduced, no evidence of
the nature of the investment was offered, and no witnesses save
for petitioner testified at trial. Petitioner asserted in her
petition that she was not negligent because she "acted under
advice of counsel in the preparation of the return", yet she
offered no evidence to support this assertion.
Based upon the record in this case, we find that petitioner
has not overcome respondent's determination of negligence. We
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