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2-percent limitation of section 67, and account should be taken
of the limitation in the Rule 155 computation.
Issue 3. Section 6662 Negligence Penalty
Respondent determined that petitioner is liable for a
penalty for negligence pursuant to section 6662(a), (b)(1) and
(c). Section 6662(a) imposes a penalty of 20 percent of the
portion of the underpayment to which section 6662 applies.
Section 6662(b)(1) provides a penalty for negligence or
intentional disregard of rules or regulations. Section 6662
defines "negligence" as including any failure to make a
reasonable attempt to comply with the provisions of the Code.
Negligence is defined as the lack of due care or the failure
to do what a reasonable and ordinarily prudent person would do
under similar circumstances. Anderson v. Commissioner, 62 F.3d
1266, 1271 (10th Cir. 1995), affg. T.C. Memo. 1993-607; Norgaard
v. Commissioner, 939 F.2d 874, 880 (9th Cir. 1991), affg. in part
and revg. in part on other grounds T.C. Memo. 1989-390.
Petitioner bears the burden of proving that respondent's
determination of negligence is erroneous. Rule 142(a); Allen v.
Commissioner, 925 F.2d 348, 353 (9th Cir. 1991); Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972).
We have held for petitioner on the substantive issues of the
net operating loss carryover from 1986 and the 1991 expense
deductions, which remove both from consideration as a possible
source of support for respondent's determination of negligence.
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