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1417, 1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982). Courts
generally look both to the underlying investment and to the
taxpayer’s position taken on the return in evaluating whether a
taxpayer was negligent. Sacks v. Commissioner, 82 F.3d 918, 920
(9th Cir. 1996), affg. T.C. Memo. 1994-217. When an investment
has such obviously suspect tax claims as to put a reasonable
taxpayer under a duty of inquiry, a good faith investigation of
the underlying viability, financial structure, and economics of
the investment is required. Roberson v. Commissioner, T.C. Memo.
1996-335, affd. without published opinion 142 F.3d 435 (6th Cir.
1998) (citing LaVerne v. Commissioner, 94 T.C. 637, 652-653
(1990), affd. without published opinion sub nom. Cowles v.
Commissioner, 949 F.2d 401 (10th Cir. 1991), affd. without
published opinion 956 F.2d 274 (9th Cir. 1992); Horn v.
Commissioner, 90 T.C. 908, 942 (1988)).
The Commissioner’s decision to impose the negligence penalty
is presumptively correct.5 Rule 142(a); Collins v. Commissioner,
857 F.2d 1383, 1386 (9th Cir. 1988), affg. Dister v.
Commissioner, T.C. Memo. 1987-217; Hansen v. Commissioner, 820
F.2d 1464, 1469 (9th Cir. 1987). A taxpayer has the burden of
5While sec. 7491 shifts the burden of production and/or
burden of proof to the Commissioner in certain circumstances,
this section is not applicable in this case because respondent’s
examination of petitioners’ return did not commence after July
22, 1998. See Internal Revenue Service Restructuring and Reform
Act of 1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727.
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