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economic substance scrutiny because the transaction predates a
statute targeting the specific abuse. See, e.g., Krumhorn v.
Commissioner, 103 T.C. 29, 48-50 (1994); Fox v. Commissioner,
supra at 1026-1027. Accordingly, section 901(k), enacted 5 years
after the transaction at issue, has no effect on the outcome of
this case.
Accuracy-Related Penalty
Respondent determined that petitioner is liable for the
section 6662(a) penalty for 1992. Section 6662(a) imposes a
penalty in an amount equal to 20 percent of the underpayment of
tax attributable to one or more of the items set forth in section
6662(b). Respondent asserts that the underpayment attributable
to the ADR transaction was due to negligence. See sec.
6662(b)(1). "Negligence" includes a failure to make a reasonable
attempt to comply with provisions of the internal revenue laws or
failure to do what a reasonable and ordinarily prudent person
would do under the same circumstances. See sec. 6662(c);
Marcello v. Commissioner, 380 F.2d 499, 506 (5th Cir. 1967),
affg. on this issue 43 T.C. 168 (1964); sec. 1.6662-3(b)(1),
Income Tax Regs. Petitioner bears the burden of proving that
respondent's determinations are erroneous. See Rule 142(a);
Freytag v. Commissioner, 904 F.2d 1011, 1017 (5th Cir. 1990),
affg. 89 T.C. 849, 887 (1987), affd. 501 U.S. 868 (1991).
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