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and Procedure. The Court agrees with and adopts the opinion of
the Special Trial Judge, which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
WOLFE, Special Trial Judge: In a so-called affected items
notice of deficiency, respondent determined additions to tax with
respect to petitioners’ 1982 Federal income tax of $6,116 under
section 6659 for valuation overstatement, $1,495 under section
6653(a)(1) for negligence, and under section 6653(a)(2) in an
amount equal to 50 percent of the interest due on $29,894, the
amount of the underpayment attributable to negligence. The
underpayment was determined pursuant to a partnership-level
proceeding.1 See secs. 6221-6233. After concessions,2 there are
two issues remaining for decision. The first issue is whether
petitioners are liable for the additions to tax under the
provisions of section 6653(a)(1) and (2) for negligence or
1 The deficiency notice apparently is based on the
assumption that petitioners invested $25,000 in SAB Foam
Recycling Associates (SAB Foam) in 1982. In these proceedings
petitioner testified that he invested $12,500, and the parties
have stipulated the amounts of petitioners’ losses and credits
claimed on their 1982 tax return on the basis of a $12,500
investment in SAB Foam. See infra note 6 and accompanying text.
2 By stipulation, petitioners concede the imposition of the
valuation overstatement addition to tax under sec. 6659. In
addition, petitioners concede that the limitations period remains
open for assessment and collection of any penalties, additions to
tax, or interest attributable to partnership items for the 1982
tax year that may be held to be due from petitioners.
Petitioners previously raised the statute of limitations as a
defense in their petition.
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