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of rules or regulations. Section 6653(a)(2) imposes another
addition to tax in an amount equal to 50 percent of the interest
due on the portion of the underpayment attributable to negligence
or intentional disregard of rules or regulations. Respondent’s
determinations in a notice of deficiency are presumed correct,
and petitioner must establish otherwise. See Rule 142(a); Welch
v. Helvering, 290 U.S. 111, 115 (1933); cf. sec. 7491(c).5
Respondent determined that petitioner's underpayment was due to
negligence. Petitioner, therefore, has the burden of proving he
was not negligent in deducting his share of the partnership’s
losses. See Estate of Mason v. Commissioner, 64 T.C. 651, 663
(1975), affd. 566 F.2d 2 (6th Cir. 1977); Bixby v. Commissioner,
58 T.C. 757, 791 (1972); Anderson v. Commissioner, T.C. Memo.
1993-607, affd. 62 F.3d 1266 (10th Cir. 1995).
Negligence is defined as the failure to exercise the due
care that a reasonable and ordinarily prudent person would
exercise under like circumstances. See Anderson v. Commissioner,
62 F.3d 1266, 1271 (10th Cir. 1995), affg. T.C. Memo. 1993-607;
5 The Internal Revenue Service Restructuring & Reform Act
of 1998, Pub. L. 105-206, sec. 3001, 112 Stat. 726, added
sec. 7491(c), which places the burden of production on the
Secretary with respect to a taxpayer’s liability for penalties
and additions to tax in court proceedings arising in connection
with examinations commencing after July 22, 1998. Petitioner
does not contend, nor is there evidence, that his examination
commenced after July 22, 1998, or that sec. 7491 is applicable in
this case.
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