- 33 -
Finally, petitioner relies heavily on Krause v.
Commissioner, 99 T.C. 132 (1992), affd. sub nom. Hildebrand v.
Commissioner, 28 F.3d 1024 (10th Cir. 1994). That case, however,
is distinguishable on its facts.
In Krause v. Commissioner, supra, we held for the taxpayers
on the issue of negligence. We did so in the context of oil
recovery technology based on special or unusual circumstances
related to the energy and oil crisis of the late 1970s and early
1980s:
In evaluating the imposition of the additions to tax
in this case, and in light of the above facts
(encouraging investments in and the development of
tertiary oil recovery methods such as * * * [enhanced
oil recovery] technology), we are somewhat
understanding of the individual investments that were
made in * * * Partnerships. In the context of the
hysteria relating to the energy crisis, the oil price
increases of the late 1970s, the industry and the
governmental interest in * * * [enhanced oil recovery]
technology, the heavy and sophisticated promotion of
these investments * * * we conclude that petitioners
are not liable for the additions to tax and the
additional interest element for negligence under
sections 6653(a), 6653(a)(1) and (2). [Id. at 178.]
None of the circumstances that were determinative in Krause
v. Commissioner, supra, are present in the case at bar.
Petitioner’s reliance on the cited case is misplaced.
In view of the foregoing, we hold that petitioner is liable
for the additions to tax under section 6653(a)(1) and (2) for
negligence. Respondent’s determination is sustained.
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