- 16 -
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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