-20-
Negligence is defined as the failure to exercise the due care
that a reasonable, prudent person would exercise under similar
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). A taxpayer has the burden of proving that
respondent's determination is in error. Rule 142(a); Luman v.
Commissioner, 79 T.C. 846, 860-861 (1982).
Petitioners claimed numerous Schedule A and Schedule C
expenses on their 1989 and 1990 returns. At trial, they
substantially reduced the amount of the deduction for most of these
expenses. For the most part, their documentation to substantiate
these expenses was lacking. Indeed, petitioners presented no
documentary evidence to support their claim of $7,174 in
miscellaneous itemized deductions for 1990.
Considering all the facts, we find that petitioners were
negligent and disregarded rules and regulations in preparing their
1989 and 1990 returns. Thus, we sustain respondent's determination
that petitioners are liable for the accuracy-related penalty on the
amount of the underpayment for 1989 and 1990.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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