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interest due on a deficiency of $10,459 under section 6653(a)(2),
and $2,615 under section 6661.
The issues for decision are: (1) Whether petitioner is
liable for the additions to tax under section 6653(a)(1) and (2)
for negligence, and (2) whether petitioner is liable for the
addition to tax under section 6661 for a substantial
understatement of tax. The issues in this case relate to the
participation of petitioner as a limited partner in a partnership
known as Utah Jojoba I Research (Utah I or the partnership).2
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioner's
legal residence was Las Vegas, Nevada.
Petitioner is a medical doctor whose particular area of
specialty is internal medicine. Petitioner has practiced
internal medicine in the Las Vegas, Nevada, area since 1962.
Petitioner became acquainted with Dr. William K. Stephan (Dr.
Stephan), a retired anesthesiologist who had taken steps to
become a licensed investment adviser. Dr. Stephan approached
petitioner about investing in Utah I, which was being promoted as
2 The stipulation of facts in this case reflects that the
actual participant in Utah I was the Neil Carmena Family Trust, a
grantor trust of which petitioner was the grantor and whose
income and deductions were reported as petitioner's on his
Federal income tax returns. For simplicity, the Court refers to
petitioner as the participant in Utah I.
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