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would do under like circumstances. Neely v. Commissioner, 85
T.C. 934 (1985). The term "negligence" includes any failure to
make a reasonable attempt to comply with the provisions of the
Internal Revenue laws, and the term "disregard" includes any
careless, reckless, or intentional disregard of rules or
regulations.
Section 6662(b)(2) provides that section 6662 shall apply to
any portion of the underpayment attributable to any substantial
understatement of income tax. There is a substantial
understatement of income tax if the amount of the understatement
exceeds the greater of (1) 10 percent of the tax required to be
shown on the return, or (2) $5,000. Sec. 6662(d)(1)(A). For
purposes of section 6662(d)(1), "understatement" is defined as
the excess of tax required to be shown on the return over the
amount of tax that is shown on the return reduced by any rebates.
Petitioner improperly claimed on his 1990 Federal income tax
return a $22,100 net loss from his horse racing activity.
Furthermore, petitioner presented no evidence to establish that
he was not negligent or did not disregard rules or regulations.
The Court concludes that petitioner was negligent or in disregard
of rules or regulations for purposes of section 6662(b)(1).
Petitioner has not established that any of the reductions under
section 6662(d)(2)(B) would apply to show that he did not have a
substantial understatement of income tax for 1990 for purposes of
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