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(b) the activities of Utah I did not constitute a trade or
business, nor was there a realistic prospect of Utah I ever
entering into a trade or business. Id.
Following the entry of the decision concerning the
partnership, respondent adjusted petitioners’ return by
disallowing their claimed share of the partnership loss, $12,407.
In the statutory notice of deficiency which provides the basis
for our jurisdiction in this case, respondent determined that
petitioners are liable for additions to tax under section
6653(a)(1) and (2) in the respective amounts of $198.20 and 50
percent of the interest due on a $3,964 deficiency.
Discussion
Section 6653(a)(1) imposes an addition to tax equal to 5
percent of the underpayment of tax if any part of the
underpayment is attributable to negligence or intentional
disregard of rules or regulations. Section 6653(a)(2) provides
for a further addition to tax 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 to include “any failure to reasonably comply with the Tax
Code, including the lack of due care or the failure to do what a
reasonable or ordinarily prudent person would do under the
circumstances.” Merino v. Commissioner, 196 F.3d 147, 154 (3d
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