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Section 6662(a) Accuracy-Related Penalty
Section 6662(a) imposes a penalty in an amount equal to 20
percent of the portion of the underpayment of tax attributable to
one or more of the items set forth in section 6662(b), including
negligence or disregard of rules or regulations. Respondent
asserts that the entire underpayment of petitioners' tax was due
to negligence or intentional disregard of rules or regulations.
Sec. 6662(b)(1). As under the predecessor section covering the
addition to tax for negligence, section 6653(a), petitioners bear
the burden of proof on the penalty in issue. Rule 142(a); Neely
v. Commissioner, 85 T.C. 934, 947 (1985). "Negligence" includes
a failure to make a reasonable attempt to comply with the
provisions of the internal revenue laws. Sec. 6662(c); sec.
1.6662-3(b)(1), Income Tax Regs. Negligence is the failure to
exercise due care or the failure to do what a reasonable and
prudent person would do under the circumstances. Neely v.
Commissioner, supra. "Disregard" includes any careless,
reckless, or intentional disregard of rules or regulations. Sec.
6662(c); sec. 1.6662-3(b)(2), Income Tax Regs.
The accuracy-related penalties of section 6662 do not apply
with respect to any portion of an underpayment if it is shown
that there was reasonable cause for such portion and the
taxpayers acted in good faith with respect to such portion. Sec.
6664(c)(1). The determination of whether the taxpayers acted
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