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3(b)(1), Income Tax Regs. "Disregard" includes any careless,
reckless or intentional disregard of the 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 a
reasonable cause for such portion and that the taxpayer acted in
good faith with respect thereto. Sec. 6664(c)(1). The
determination of whether a taxpayer acted with reasonable cause
and in good faith depends upon the pertinent facts and
circumstances of a particular case. Sec. 1.6664-4(b)(1), Income
Tax Regs.
The taxpayer bears the burden of showing that the
Commissioner's determination of negligence or disregard of rules
or regulations is erroneous. Rule 142(a); Bixby v. Commissioner,
58 T.C. 757, 791 (1972).
Petitioners do not specifically contend that they are not
liable for the accuracy-related penalty apart from their
contention that there is no underpayment of tax for either 1989
or 1990. However, we have already held to the contrary.
Therefore, they have failed to carry their burden of proof on
this issue. In addition, we think that petitioners' failure to
maintain adequate books and records reflecting their true income
indicates an intentional disregard for the rules or regulations.
Moreover, the record does not reveal any reasonable cause for
such disregard.
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