William G. and Debra C. Kellen - Page 2




                                        - 2 -                                         

                            Additions to tax                                          
               Sec.1            Sec.            Sec.                                  
               Year       6653(a)(1)      6653(a)(2)        36661                     
          1983        $685.50        2$29,095.94      $3,427.50                       

                    1 Throughout this opinion and unless otherwise                    
               indicated, all section references are to the Internal                  
               Revenue Code in effect for the taxable year in issue.                  
                    2 The first page of the notice of deficiency                      
               mistakenly shows this amount as the sum of the additions               
               to tax under sec. 6653(a)(1) and (2), i.e., $29,781.                   
                    3 The first page of the notice of deficiency                      
               mistakenly references sec. 6662(d), which section is the               
               successor to sec. 6661 and is applicable for returns the               
               due date for which (determined without regard to                       
               extensions) is after December 31, 1989.  See Omnibus                   
               Budget Reconciliation Act of 1989, Pub. L. 101-239, sec.               
               7721(a), (c)(2), (d), 103 Stat. 2395-2400.                             

               After concessions by the parties,1 the issues for decision             
          are as follows:                                                             
               (1) Whether petitioner William G. Kellen (petitioner) is               
          liable for additions to tax under section 6653(a)(1) and (2) for            
          negligence or intentional disregard of rules or regulations.  We            
          hold that petitioner is liable for such additions.                          
               (2) Whether petitioner is liable for the addition to tax               
          under section 6661 for substantial understatement of tax                    



               1 Petitioners concede that the notice of deficiency is                 
          valid.  Cf. Scar v. Commissioner, 814 F.2d 1363 (9th Cir. 1987),            
          revg. 81 T.C. 855 (1983).                                                   
               Respondent concedes, and petitioner William G. Kellen does             
          not dispute, that pursuant to sec. 6015, petitioner Debra C.                
          Kellen is entitled to relief from joint and several liability for           
          the additions to tax.                                                       




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