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Dr. Beck’s Liability for Accuracy-Related Penalties
Respondent contends that for each year in issue Dr. Beck is
liable for the section 6662(a) accuracy-related penalty. Section
6662(a) imposes a 20-percent penalty on any portion of an
underpayment that is attributable to, among other things,
negligence or disregard of the rules or regulations. Sec.
6662(b)(1). Negligence is the lack of due care or failure to do
what a reasonable and ordinarily prudent person would do under
the same circumstances. Neely v. Commissioner, 85 T.C. 934
(1985). No penalty shall be imposed under section 6662(a) with
respect to any portion of an underpayment if it is shown that
there was reasonable cause and that the taxpayer acted in good
faith. Sec. 6664(c).
Dr. Beck failed to produce evidence to substantiate the
deductions he claimed on his Schedules C and F. His failure to
maintain and to produce records of his business activities shows
not only negligence but intentional disregard of rules and
regulations requiring a taxpayer to keep permanent records
sufficient to establish his gross income and deductions. See
Crocker v. Commissioner, 92 T.C. 899, 917 (1989); Schroeder v.
Commissioner, 40 T.C. 30, 34 (1963).
Dr. Beck has come forward with no evidence to establish that
he acted in good faith. As previously discussed, Dr. Beck’s
claims that office cleaning people accidentally discarded all his
business records are not credible. Dr. Beck is liable for the
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