Eugene A. Sanders - Page 16

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               As we noted in Hansen v. Commissioner, T.C. Memo. 2004-269:            
               adopting [petitioner’s] position would imply that                      
               taxpayers should have been given carte blanche to                      
               invest in partnerships promoted by Mr. Hoyt, merely                    
               because Mr. Hoyt had previously engaged in activities                  
               which withstood one type of challenge by the                           
               Commissioner, no matter how illegitimate the                           
               partnerships had become or how unreasonable the                        
               taxpayers were in making investments therein and                       
               claiming the tax benefits that Mr. Hoyt promised would                 
               ensue.                                                                 
          Consequently, we reject petitioner’s claim that at the time he              
          filed his 1991 return, Bales v. Commissioner, T.C. Memo. 1989-              
          568, provided support for the positions taken on that return with           
          respect to his Hoyt investment.                                             
               We find that petitioner has failed to show that he was not             
          negligent with respect to the underpayment for the taxable year             
          at issue.  We further find that petitioner has failed to show               
          that he acted with reasonable cause, or in good faith, with                 
          respect to such underpayment.  Accordingly, we find that                    
          petitioner has failed to establish that he is not liable for the            
          accuracy-related penalty under section 6662(a) for the taxable              
          year at issue.13                                                            



               13  We have found that petitioner is liable for the taxable            
          year at issue for the accuracy-related penalty under sec. 6662(a)           
          because of negligence or disregard of rules or regulations under            
          sec. 6662(b)(1).  In light of that finding, we need not address             
          respondent’s alternative argument that petitioner is liable for             
          the taxable year at issue for the accuracy-related penalty under            
          sec. 6662(a) because of a substantial understatement of income              
          tax under sec. 6662(b)(2).                                                  





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