Opinion ID: 470076
Heading Depth: 1
Heading Rank: 5

Heading: the addition to tax

Text: 24 In his answer in the Tax Court, the Commissioner assessed an addition to tax against taxpayers Hartman, Webber, and Wohl for their failure to report investment tax credit recapture for beavers that died or were otherwise disposed of. The addition was assessed under 26 U.S.C. Sec. 6653(a), which imposes an addition to tax for any underpayment of tax that is the result of negligence or intentional disregard of the rules or regulations. Because the Commissioner raised the issue for the first time in his answer he has the burden of proof on this issue. 2 Rule 142(a), Rules of Practice and Procedure of the United States Tax Court (May 1, 1979). 25 The Tax Court held that the Commissioner sustained his burden of proof, and it upheld his assessment. That decision was not clearly erroneous. A mere showing that the tax was not paid is not enough to prove negligence for purposes of section 6653(a). Poen v. Commissioner, 48 T.C.M. (P-H) 867, 868 (1979). However, in this case, the Commissioner also showed that these taxpayers were sophisticated businessmen who were aware of the provisions for recapture of investment tax credit. This showing is enough to satisfy the Commissioner's burden of proof on this issue. 26 Taxpayer Hartman argues that his failure to report investment tax credit recapture was not negligent because he received a replacement beaver for each of his beavers that died, resulting in an investment tax credit wash. Hartman raised this issue for the first time during the Rule 155 computation proceedings. New issues may not be raised in a Rule 155 proceeding. Rule 155(c), Rules of Practice and Procedure of the United States Tax Court. Therefore, this issue is not before us. However, the argument has no merit. Hartman admits that he should have reported the recapture. The fact that he received replacement beavers for which a new investment tax credit was available is irrelevant.