- 2 -
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
The issues for decision are: (1) Whether petitioners are
liable for additions to tax for negligence under section 6653(a);
(2) whether petitioners are liable for the addition to tax for a
substantial understatement under section 6661; (3) whether this
Court has jurisdiction to review the section 6621(c) tax-
motivated interest assessed by respondent and remaining unpaid by
petitioners; and (4) if this Court does have jurisdiction to
review the tax-motivated interest, whether such interest was
properly assessed in this case.1 The issues in this case concern
an investment in Yuma Mesa Jojoba, Ltd. (“Yuma Mesa” or “the
partnership”).2
1In their petition, petitioners raised the additional issues
of the possible applicability of sec. 6404(g), regarding
suspension of interest and penalties, and the possible
applicability of the statute of limitations under sec. 6229(f).
Petitioners, however, did not include these issues in either
their trial memorandum or their posttrial brief. We therefore
consider them to have been abandoned.
2The underlying deficiency in this case is based upon a
computational adjustment made by respondent in accordance with
partnership level adjustments. Those adjustments were upheld by
this Court in Cactus Wren Jojoba, Ltd. v. Commissioner, T.C.
Memo. 1997-504. In that case, this Court reviewed respondent’s
determinations with respect to Yuma Mesa and a related
partnership. We held that the partnerships did not directly or
indirectly engage in research or experimentation and that the
partnerships lacked a realistic prospect of entering into a trade
or business. In upholding respondent’s disallowance of
$1,298,031 in research and experimental expenditures claimed by
Yuma Mesa, we described the research and development agreement
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011