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which they had remitted to Mr. Hoyt as part of their investment
and which they never received back. Nevertheless, petitioners
believed that this money was being used for their own personal
benefit--at the time that they claimed the refunds, they believed
that they would eventually benefit from them. Petitioners also
lost a substantial amount of out-of-pocket cash which they paid
to Mr. Hoyt in the years following the years in issue. In fact,
some of these later payments were made in response to not-so-
thinly-veiled threats by Mr. Hoyt of retaliatory action if
petitioners failed to remit the payments. However unfortunate
petitioners’ situation became, it cannot alter our conclusion
that petitioners were negligent with respect to entering the Hoyt
investment, and that they were negligent with respect to the
positions that they took on their tax returns and the Form 1045
in the years in issue.
We hold that petitioners are liable for the section 6653
additions to tax for negligence with respect to the entire amount
of the deficiency in each of 1984, 1985, 1987, and 1988.
With respect to 1989, we note that only one section 6662(a)
penalty may be applied with respect to any given portion of an
underpayment, even if that portion is attributable to more than
one of the relevant factors. Sec. 1.6662-2(c), Income Tax Regs.
Accordingly, we hold that petitioners are liable for the section
6662(a) penalty for negligence with respect to that portion of
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