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Section 6662(a) Accuracy-Related Penalty
Section 6662(a) imposes a penalty in an amount equal to
20 percent of the underpayment of tax attributable to one or more
of the items set forth in section 6662(b). Respondent asserts
that the entire underpayment of petitioners’ tax was due to
negligence or intentional disregard of rules or regulations.
Sec. 6662(b)(1). Except for the increased penalties set forth in
respondent’s amended answer, for which respondent bears the
burden of proof, petitioners bear the burden of proof on the
penalties in issue. Rule 142(a).
“Negligence” includes a failure to make a reasonable attempt
to comply with the provisions of the internal revenue laws. Sec.
6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. “Disregard”
includes any careless, reckless, or intentional disregard of
rules or regulations. Sec. 6662(c); sec. 1.6662-3(b)(2), Income
Tax Regs.
The accuracy-related penalty does not apply with respect to
any portion of an underpayment if it is shown that there was
reasonable cause for such portion and that petitioners acted in
good faith with respect to such portion. Sec. 6664(c)(1). The
determination of whether petitioners acted with reasonable cause
and in good faith depends upon the pertinent facts and
circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs.
Reliance on a qualified adviser will constitute reasonable
cause only if the taxpayers have acted in good faith and have
made full disclosure of all relevant facts to the adviser. Paula
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Last modified: May 25, 2011