Norman H. Fawson and Mary Jane B. Fawson - Page 15




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          should have recognized additional warning signs including the               
          offering’s warnings of tax risks involved with the investment and           
          the terms of the licensing agreement which canceled the R&D                 
          agreement.                                                                  
               Petitioners did not exercise the due care of reasonable and            
          ordinarily prudent persons under the circumstances.  Accordingly,           
          we hold that petitioners are liable for the negligence additions            
          to tax imposed by the provisions of section 6653(a)(1) and (2).             
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for respondent.                          





























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