Richard G. and Carolyn J. Newhouse - Page 15




                                       - 14 -                                         
               The Court does not lightly set aside stipulations of fact              
          but may exercise broad discretion to determine whether to hold a            
          party to a stipulation.  Blohm v. Commissioner, 994 F.2d 1542,              
          1553 (11th Cir. 1993), affg. T.C. Memo. 1991-636.  "The evidence            
          in the record demonstrates that the stipulation is simply                   
          incorrect."  Estate of Eddy v. Commissioner, 115 T.C. 135, 137              
          n.4 (2000).  Stipulations of fact that are contrary to facts                
          contained in the record do not bind the Court.  Blohm v.                    
          Commissioner, supra; Estate of Eddy v. Commissioner, supra;                 
          Estate of Branson v. Commissioner, T.C. Memo. 1999-231.                     
               Petitioners failed to file timely their Federal income tax             
          return for 1995.  They have failed to offer any evidence that               
          such failure was due to reasonable cause and not to willful                 
          neglect.  Respondent's determination that they are liable for the           
          addition to tax under section 6651(a) is sustained.                         
               Reviewed and adopted as the report of the Small Tax Case               
          Division.                                                                   
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for respondent.                          













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