Shannon D. Mullins - Page 15

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          1.6662-3(b)(1)(ii), Income Tax Regs.  “Disregard” includes any              
          careless, reckless, or intentional disregard.  Sec. 6662(c).                
               Respondent has introduced evidence sufficient to establish             
          the appropriateness of imposing an accuracy-related penalty under           
          section 6662.  Higbee v. Commissioner, supra at 446-447.                    
          Petitioner has the burden of proving that respondent’s                      
          determination is incorrect with respect to the portion of the               
          underpayment of tax attributable to items set forth in the notice           
          of deficiency.  Id.  Respondent has the burden of proof in regard           
          to the portion of the underpayment attributable to the new issue            
          (the capital gain income).  Rule 142(a); Harrison v.                        
          Commissioner, T.C. Memo. 1994-268.  The facts of this case permit           
          us to opine on this issue on the merits without regard to which             
          party has the burden of proof.                                              
               Respondent contends that petitioner was negligent both in              
          failing to report both his pro rata share of income and                     
          deductions from Edgington Mullins, as reported on Schedule K-1,             
          and in failing to report capital gains from the sale of his                 
          shares of Edgington Mullins stock.  We agree.  Petitioner’s only            
          argument at trial was that he believed that he sold his Edgington           
          Mullins stock at a loss because he originally purchased his                 
          shares for $35,000 and only received $28,000 when he sold the               
          shares to Mr. Taylor.  Petitioner admits that he did not inform             
          his tax preparer that he sold his interest in Edgington Mullins             

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