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replacement property, the deferred gain would have to be
recognized and the partnership would have to file an amended
return for 1992.
In the normal course of their business activities,
petitioner and Segrest met for lunch, during which time they
discussed business, golf, and their specific projects. During
one of these meetings in late 1995 or early 1996, Segrest told
petitioner that the partnership had prepared an amended return
for the 1992 taxable year, in which it reported the gain from the
sale of the property, and that Segrest owed tax on his portion of
the gain.
Petitioners did not report petitioner's portion of the gain
in either their return or in an amended return for 1992.
OPINION
Respondent determined that petitioners are liable for the
accuracy-related penalty for negligence or intentional disregard
of rules or regulations pursuant to section 6662. The burden is
on the taxpayer to prove the Commissioner's imposition of the
penalty is in error. See Rule 142(a); Luman v. Commissioner, 79
T.C. 846, 860-861 (1982); Bixby v. Commissioner, 58 T.C. 757, 791
(1972).
Section 6662 provides for the imposition of a penalty equal
to 20 percent of the portion of the underpayment which is
attributable to negligence or disregard of rules or regulations.
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