- 27 -
With respect to 1991, the year in issue in this case,
petitioner claimed that he incurred $55,880 in losses from the
Hoyt partnerships. Petitioner did not know how these losses were
derived; he knew only that the Hoyt organization had reported the
amounts on the Schedules K-1 and on his tax return. Petitioner
claimed these losses despite the fact that respondent had been
warning petitioner, at least since May 1988, that there were
potential problems with the tax claims being made on both the
partnership returns and on petitioner’s returns. Prior to
signing his 1991 return, petitioner had received at least 12
separate letters from respondent alerting petitioner to suspected
problems or alerting petitioner to reviews that had been
commenced with respect to various Hoyt partnerships in which he
was involved. Despite these letters, petitioner did not further
investigate the partnership losses, such as by consulting an
independent tax adviser, before claiming the losses as deductions
on his 1991 return. We conclude that petitioner was negligent in
1991 in claiming the Hoyt partnership loss at issue in this case;
namely, the $16,720 loss from DSBS 87-C.
IV. Alleged Defenses to the Accuracy-Related Penalty
Section 6664(c)(1) provides that the section 6662(a)
accuracy-related penalty is not imposed “with respect to any
portion of an underpayment if it is shown that there was a
reasonable cause for such portion and that the taxpayer acted in
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