Stephen Kowalchuk - Page 6




                                         - 6 -                                          
          under section 6653(a) for negligence and the valuation                        
          overstatement addition to tax under section 6659.                             
                                      Discussion                                        
               This case is one of many cases involving additions to tax                
          resulting from the plastics recycling scheme.  See, e.g.,                     
          Grelsamer v. Commissioner, T.C. Memo. 1996-399, affd. without                 
          published opinion sub nom. Morgan v. Commissioner, 138 F.3d 957               
          (11th Cir. 1998).  Except for a few cases that involved                       
          exceptional circumstances, the Court has upheld the imposition of             
          the additions to tax.  See Grelsamer v. Commissioner, supra at                
          n.2.  This case is similar to the many cases that have fallen on              
          the other side of the line.                                                   
          A.  Section 6653(a)--Negligence                                               
               In a notice of deficiency for 1982 respondent determined                 
          that petitioner is liable for the additions to tax for negligence             
          under section 6653(a)(1) and (2).  Petitioner has the burden of               
          proving that respondent's determinations of these additions to                
          tax are erroneous.  See Rule 142(a); 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).                                    
               Section 6653(a)(1) imposes an addition to tax equal to 5                 
          percent of the underpayment if any part of an underpayment of tax             
          is due to negligence or intentional disregard of rules or                     
          regulations.  Section 6653(a)(2) imposes an addition to tax equal             






Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011