Daniel L. and Ingrid N. Carroll - Page 23




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          conclusion.  Rather, there is ample evidence on the record in the           
          present case to establish independently that the series of                  
          Plastics Recycling transactions, of which petitioners’ Clearwater           
          transaction was a part, constituted an economic sham.  However,             
          because petitioners have provided no further evidence nor any               
          novel contention with respect to the underlying deficiency not              
          previously considered in Provizer, we shall not revisit that                
          opinion.  Accordingly, we sustain respondent’s determination for            
          substantially identical reasons as in Provizer.                             
          Issue 2.  Section 6653(a)(1) and (2) Negligence                             
               Respondent determined that petitioners are liable for                  
          additions to tax under section 6653(a)(1) and (2) with respect to           
          the underpayment attributable to petitioners’ investment in                 
          Clearwater.  Petitioners have the burden of proof to show that              
          they were not negligent.  See Addington v. Commissioner, 205 F.3d           
          54 (2d Cir. 2000), affg. Sann v. Commissioner, T.C. Memo. 1997-             
          259; Goldman v. Commissioner, 39 F.3d 402, 407 (2d Cir. 1994),              
          affg. T.C. Memo. 1993-480; Luman v. Commissioner, 79 T.C. 846,              
          860-861 (1982); Bixby v. Commissioner, 58 T.C. 757, 791-792                 
          (1972).                                                                     
               Section 6653(a)(1) and (2) imposes additions to tax if any             
          part of the underpayment of 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           





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