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considering the negligence addition, we evaluate the particular
facts of each case, judging the relative sophistication of the
taxpayers as well as the manner in which the taxpayers approached
their investment. Turner v. Commissioner, T.C. Memo. 1995-363.
Respondent’s determination of negligence is presumed
correct, and petitioners bear the burden of proving that they
were not negligent. Neely v. Commissioner, supra. See generally
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).5
With respect to the large number of Plastics Recycling cases
that have come before this Court, we have seen taxpayers from all
walks of life and with greatly varying levels of education and
investment experience. In all such cases, there have been only
two in which we held that the taxpayers were not negligent with
respect to their participation in the Plastics Recycling Program,
Dyckman v. Commissioner, T.C. Memo. 1999-79, and Zidanich v.
Commissioner, T.C. Memo. 1995-382. Both cases involved unusual
circumstances not present in the instant case, as discussed
further below.
5Compare sec. 7491(c), which places the burden of production
on respondent with respect to a taxpayer’s liability for
penalties and additions to tax. Sec. 7491(c) is effective for
court proceedings arising in connection with examinations
commencing after July 22, 1998. Petitioners do not contend, nor
is there evidence, that their examination commenced after July
22, 1998, or that sec. 7491 is applicable in this case. The
notices of deficiency sent to petitioners with respect to the
years in issue are dated Jan. 27, 1995.
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