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negligence, there shall be added to the tax an amount equal to 5
percent of the underpayment. The term "underpayment" generally
is defined as the amount of the deficiency. Sec. 301.6653-
1(c)(1)(i), Proced. & Admin. Regs. The term "negligence" is
defined as the failure to exercise the due care that a reasonable
and ordinarily prudent person would exercise under the
circumstances. Zmuda v. Commissioner, 731 F.2d 1417, 1422 (9th
Cir. 1984), affg. 79 T.C. 714 (1982); Neely v. Commissioner, 85
T.C. 934, 947 (1985).
Petitioner excluded from the gross estate one-half of the
value of the Joint Tenancy Account. The validity of this
position depended on whether property interests passed under
Earl's will, which in turn depended on the value of the assets
Earl held at the time of his death. Although David knew the
approximate value of Earl's assets in years prior to Earl's
death, he did not know the value of Earl's assets on the date
Earl died. Further, he apparently did not determine whether Earl
had liabilities. Therefore, he failed to exercise reasonable
care when he excluded one-half of the value of the Joint Tenancy
Account. Because petitioner's underpayment of tax was due in
part to negligence, respondent's imposition of the addition to
tax for negligence is sustained.
VII. Addition to Tax for Late Filing
Section 6651(a)(1) imposes an addition to tax for failure to
file a return prior to the due date, including extensions, unless
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