Richard L. and Kathryn Dyckman - Page 6




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          decision, petitioners cashed in an IRA and paid their liability.            
               Thereafter, on September 5, 1995, respondent issued the                
          affected items notice of deficiency for 1982 determining                    
          additions to tax under sections 6653(a)(1) and (2) and 6659.                
          Petitioners filed their petition with this Court on November 20,            
          1995.                                                                       
                                       OPINION                                        
          Issue (1)  Section 6653(a)(1) and (2) Negligence                            
               Section 6653(a)(1) and (2) imposes additions to tax if any             
          part of the underpayment of the tax is due to negligence or                 
          intentional disregard of rules or regulations.  Negligence is               
          defined as the failure to exercise the due care that a reasonable           
          and ordinarily prudent person would exercise under the                      
          circumstances.  See Neely v. Commissioner, 85 T.C. 934, 947                 
          (1985).                                                                     
               A taxpayer may avoid liability for negligence in the case of           
          reasonable reliance on a competent professional adviser.  See               
          United States v. Boyle, 469 U.S. 241, 250-251 (1985); Freytag v.            
          Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th             
          Cir. 1990), affd 501 U.S. 868 (1991).  Although reliance on                 
          professional advice, standing alone, is not an absolute defense             
          to negligence, it is a factor to be considered.  See Freytag v.             
          Commissioner, supra.                                                        
               The pertinent question is whether a particular taxpayer's              
          actions are reasonable in light of the taxpayer's experience, the           
          nature of the investment, and the taxpayer's actions in                     

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