Wayne and Pamela Berry - Page 15




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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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