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Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973);
see also Turner v. Commissioner, T.C. Memo. 1995-363 (“When
considering the negligence addition, we evaluate the particular
facts of each case, judging the relative sophistication of the
taxpayers as well as the manner in which the taxpayers approached
their investment.”). The determination of negligence is highly
factual.
Respondent determined that petitioner is liable for
negligence under section 6653(a)(1) and (2) with respect to the
underpayment of tax attributable to petitioner’s investment in
SAB Foam. Respondent’s determination of negligence is presumed
correct, and petitioner has the burden of proving that he was not
negligent. See Rule 142(a); Welch v. Helvering, 290 U.S. 111,
115 (1933); see also Addington v. Commissioner, supra; Goldman v.
Commissioner, 39 F.3d 402, 407 (2d Cir. 1994), affg. T.C. Memo.
1993-480; Luman v. Commissioner, 79 T.C. 846, 860-861 (1982);
Bixby v. Commissioner, 58 T.C. 757, 791-792 (1972).9
A taxpayer may avoid liability for negligence under section
6653(a)(1) and (2) if he or she reasonably relied on competent
professional advice. United States v. Boyle, 469 U.S. 241, 250-
9 Cf. sec. 7491(c), which places the burden of production
on the Commissioner with respect to a taxpayer’s liability for
penalties and additions to tax. Sec. 7491(c) is effective for
court proceedings arising in connection with examinations
commencing after July 22, 1998. Petitioner does not contend, nor
is there evidence, that the examination commenced after July 22,
1998, or that sec. 7491(c) is applicable in this case.
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