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attributable to any one of specified factors, one of which is
negligence. Respondent determined that petitioner is liable for
the accuracy-related penalty imposed by section 6662(a), and that
the entire underpayment of tax was due to negligence.
"Negligence" includes a failure to make a reasonable attempt to
comply with the provisions of the Internal Revenue laws or to
exercise ordinary and reasonable care in the preparation of a tax
return. 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.
However, section 6664(c)(1) provides that the penalty under
section 6662(a) shall not apply to any portion of an
underpayment, if it is shown that there was reasonable cause for
the taxpayer's position with respect to that portion and that the
taxpayer acted in good faith with respect to that portion. Sec.
6664(c)(1). The determination of whether a taxpayer acted with
reasonable cause and in good faith within the meaning of section
6664(c)(1) is made on a case-by-case basis, taking into account
all the pertinent facts and circumstances. Sec. 1.6664-4(b)(1),
Income Tax Regs. The most important factor is the extent of the
taxpayer's effort to assess her proper tax liability for the
year. Id. Reliance by the taxpayer on the advice of a qualified
adviser will constitute reasonable cause and good faith, if,
under all of the facts and circumstances, the reliance by the
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Last modified: May 25, 2011