Charles A. Greene and Christine J. Greene - Page 15

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          Federal income tax returns were reasonable in light of their                
          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.                                          
               Petitioners, citing Chamberlain v. Commissioner, 66 F.3d 729           
          (5th Cir. 1995), affg. in part and revg. in part T.C. Memo. 1994-           
          228, caution the Court to distinguish carefully between                     
          "negligence" in making the underlying investment and the                    
          negligence reached by section 6653(a).  We find the correct                 
          standard to be announced in the section itself.  If any part of             
          an underpayment of tax is due to negligence, it is subject to the           
          additions to tax provided by section 6653(a).  See Sacks v                  
          Commissioner, 82 F.3d 918, 920 (9th Cir. 1996) (negligence in               
          claiming a tax deduction depends upon both the legitimacy of the            
          underlying investment and due care in claiming the deduction),              
          affg. T.C. Memo. 1994-217; Novinger v. Commissioner, T.C. Memo.             
          1991-289; Rogers v. Commissioner, T.C. Memo. 1990-619.                      
          Description of the Underlying Investment                                    
               The exact nature of the underlying partnership investment in           
          this case is not clear directly from the record.  Some                      
          partnership documents were introduced into evidence, and the                
          parties stipulated that the partnership possessed the rights to a           
          device called the "Terra-Drill", which we discuss below.  But no            
          prospectus or offering memorandum was produced, few facts on the            

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