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Commissioner, T.C. Memo. 2001-255. A trial before the Tax Court
is a proceeding de novo; our determination of a taxpayer’s
liability is based on the merits of the case and not on the
record developed at the administrative level. Greenberg’s
Express, Inc. v. Commissioner, supra at 328.
With regard to the burden of proof as it pertains to their
liability for the deficiency in their income tax, petitioners’
long-winded arguments are misplaced. The resolution of their
liability for the deficiency does not depend on which party has
the burden of proof. Petitioners have stipulated the amounts
omitted from their tax return. There are no material facts in
dispute. Since only legal issues remain, the burden of proof is
irrelevant. Nis Family Trust v. Commissioner, 115 T.C. 523, 538
(2000). Accordingly, we sustain respondent’s deficiency
determination.
The second issue for decision is whether petitioners are
liable for the section 6662(a) accuracy-related penalty for 1998.
Section 6662(a) imposes a 20-percent penalty on underpayments
attributable to, among other things, the taxpayer’s negligence or
disregard of rules or regulations. Negligence is defined to
include the “failure to make a reasonable attempt to comply” with
the tax laws. Sec. 6662(c). A position with respect to an item
is attributable to negligence if it lacks a reasonable basis.
Sec. 1.6662-3(b)(1), Income Tax Regs. The term “disregard”
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