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appropriateness of applying a particular addition to tax or
penalty to the taxpayer. Respondent need not negate all defenses
to the additions or penalties. See Higbee v. Commissioner,
116 T.C. 438, 446 (2001). Respondent has met his burden with
respect to his claim of negligence by establishing that the
J. Shirleys, in understating their income and claiming improper
and unsubstantiated deductions, were negligent and disregarded
rules and regulations. Further, the deficiency we have
redetermined indicates a substantial understatement of income.
See sec. 6662(d). On brief, the J. Shirleys fail to address
respondent’s determination of an accuracy-related penalty. We
assume that they rely exclusively on our finding that there was
no deficiency in tax. Since we have found a deficiency in tax,
we sustain respondent’s determination of a penalty under section
6662(a) on the grounds of either negligence or substantial
understatement of income, modified only to take account of the
amount of the deficiency that we have determined.
2. Section 6673(a)(1)
Respondent asks that we impose a penalty against the J.
Shirleys under section 6673(a)(1). That section provides:
SEC. 6673. SANCTIONS AND COSTS AWARDED BY COURTS.
(a) Tax Court Proceedings.--
(1) Procedures instituted primarily for delay,
etc.--Whenever it appears to the Tax Court that--
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