- 17 -
See Addington v. Commissioner, 205 F.3d 54, 58 (2d Cir. 2000),
affg. Sann v. Commissioner, T.C. Memo. 1997-259; Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972); Anderson v.
Commissioner, T.C. Memo. 1993-607, affd. 62 F.3d 1266 (10th Cir.
1995). See generally Rule 142(a); INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115
(1933).13
Section 6653(a)(1) imposes an addition to tax in an amount
equal to 5 percent of the underpayment of tax if any part of the
underpayment is due to negligence or intentional disregard 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.
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; Neely v.
Commissioner, 85 T.C. 934, 947 (1985). The focus of inquiry is
12(...continued)
petitioners bear the burden of proof regarding their liability
for this addition to tax. In any event, we would resolve this
issue for respondent based on a preponderance of the evidence.
13 Cf. sec. 7491(c), effective for court proceedings
arising in connection with examinations commencing after July 22,
1998. In the present case, the examination of petitioners’
income tax return for 1983 commenced well before July 22, 1998.
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