William R. and Betty O. Bass - Page 9

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          affg. T.C. Memo. 1994-217; Turner v. Commissioner, T.C. Memo.               
          1995-363.  In this regard, the determination of negligence is               
          highly factual.                                                             
               In his testimony quoted above, petitioner indicated that he            
          spent very little time investigating the viability of an                    
          investment in jojoba farming or the likely tax treatment of that            
          investment, relying on his experience in similar investments.  He           
          offered in evidence at trial tax returns from earlier years on              
          which he had deducted various partnership losses.  Among the                
          papers that he presented, however, was a decision where this                
          Court determined that he owed a deficiency and a negligence                 
          addition to tax for 1981.  Petitioner’s experience is not                   
          persuasive evidence that he was qualified to assess the viability           
          and the proper treatment of the Cal-Neva partnership, relying               
          solely on the promoters.  Based on the limited effort described             
          by petitioner and consistent with all opinions in similar cases,            
          we conclude that petitioners failed to exercise reasonable care             
          and are liable for the additions to tax for negligence.                     
               Section 6661(a), as amended by the Omnibus Budget                      
          Reconciliation Act of 1986, Pub. L. 99-509, sec. 8002, 100 Stat.            
          1951, provides for an addition to tax of 25 percent of the amount           
          of any underpayment attributable to a substantial understatement            
          of income tax for the taxable year.  A substantial understatement           
          of income tax exists if the amount of the understatement exceeds            

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