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the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). It includes the failure to make a reasonable attempt to
comply with the Internal Revenue Code. Sec. 6662(c). In
determining whether a corporation is liable for the negligence
penalty, the acts of officers on behalf of the corporation are
imputed to the corporation. DiLeo v. Commissioner, 96 T.C. 858,
875 (1991), affd. 959 F.2d 16 (2d Cir. 1992); Auerbach Shoe Co.
v. Commissioner, 21 T.C. 191, 194 (1953), affd. 216 F.2d 693 (1st
Cir. 1954); Ibabao Med. Corp. v. Commissioner, T.C. Memo. 1988-
285.
We conclude that petitioner failed to exercise ordinary
care. The record establishes that the plan was both designed and
manipulated to direct the flow of corporate earnings to Messrs.
Blazick and Richter and to disguise such payments as
compensation.
We have considered all other arguments made by the parties
and found them to be either irrelevant or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011