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section 6651(f) for the 1989 taxable year, and section 6663 for
the 1990 taxable year is sustained.
Negligence
Respondent contends that the negligence addition to tax
under section 6653(a) for the 1987 and 1988 taxable years and the
negligence penalty under section 6662(a) for the 1990 taxable
year apply to the portions of the deficiencies in tax that are
not subject to the fraud addition to tax (namely, the Schedule F
losses, the underreported interest income in 1987, and the
Schedule C landscaping and harness-racing losses in 1990).12 The
portions of the deficiencies against which the negligence
additions to tax and negligence penalty were determined relate
primarily to unsubstantiated claimed Schedule C and Schedule F
expenses.
Section 6653(a)(1)(A) and (a)(2), as applicable for 1987,
imposes an addition to tax if any part of an underpayment of tax
required to be shown on a return is due to negligence or
disregard of rules or regulations in the amount of 5 percent of
the portion of the underpayment which is not attributable to
fraud. Section 6653(a)(1)(B) imposes an addition to the tax in
the amount of 50 percent of the interest due with respect to the
portion of the underpayment which is attributable to negligence
12 Under sec. 6664(b), the negligence penalty determined in
the notice of deficiency does not apply for 1989 because
petitioner did not file a 1989 tax return.
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