Jeffrey H. Weitzman - Page 12




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          $50,000; (2) held that the transaction, which was virtually                 
          identical to the transaction in the present case, was a sham                
          because it lacked economic substance and a business purpose; (3)            
          sustained the additions to tax for negligence under section                 
          6653(a)(1) and (2); (4) sustained the addition to tax for                   
          valuation overstatement under section 6659 because the                      
          underpayment of taxes was directly related to the overvaluation             
          of the recyclers; and (5) held that the partnership losses and              
          tax credits claimed with respect to the plastics recycling                  
          partnership at issue were attributable to tax-motivated                     
          transactions within the meaning of section 6621(c).  We also                
          found that other recyclers were commercially available during the           
          years in issue.  Id.                                                        
               In this case, respondent determined that petitioner is                 
          liable for additions to tax for negligence under section                    
          6653(a)(1) and (2) with respect to underpayments of tax                     
          attributable to petitioner’s investment in Foam.  Section                   
          6653(a)(1) imposes an addition to tax equal to 5 percent of the             
          underpayment if any part of an underpayment of tax is due to                
          negligence or intentional disregard of rules or regulations.  An            
          additional amount is added to the tax under section 6653(a)(2) in           
          an amount equal to 50 percent of the interest payable with                  
          respect to the portion of the underpayment attributable to                  
          negligence.                                                                 






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