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discussion, petitioners are deemed to have admitted certain
facts. The deemed admissions were made pursuant to Rule 90(c).
By the deemed admissions, petitioners are deemed to admit certain
facts, which when taken together, establish that they failed to
exercise the due care of a reasonable and ordinarily prudent
person under like circumstances. For example, petitioners are
deemed to admit that they invested in abusive trusts and that
they refused to cooperate or provide documents to respondent
during the examination of petitioners' 1995 and 1996 Federal
income tax returns. We conclude that respondent met his burden
of production under section 7491(c) with regard to the accuracy-
related penalties determined based on negligence or disregard of
rules or regulations.2 See Rule 90(c); Nis Family Trust v.
Commissioner, 115 T.C. 523, 542-543 (2000). Because respondent
met his burden of production through the deemed admissions and
petitioners failed to disprove respondent’s determinations (e.g.,
by proving reasonable cause), we hold that petitioners are liable
for the accuracy-related penalties in issue. See secs.
6662(b)(1), 6664(c); Higbee v. Commissioner, supra. In that
respect, respondent's motion to dismiss for failure to prosecute
insofar as it relies on the deemed admissions will be treated and
granted as a motion for partial summary judgment.
2 We therefore need not address respondent’s determination
of the accuracy-related penalties based on a substantial
understatement of tax.
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