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Based on our review of the record, we are not convinced that
the underpayment of tax for each year at issue is due to fraud on
the part of petitioner. We conclude that respondent has not
proven by clear and convincing evidence that petitioner is liable
for the section 6663(a) fraud penalty for 1989 and 1990.
Respondent determined that petitioner is liable for
accuracy-related penalties under section 6662(a) for both 1989
and 1990. Section 6662(a) and (b)(1) imposes a penalty on any
portion of an underpayment that is attributable to negligence or
disregard of rules or regulations. The term "negligence"
includes any failure to make a reasonable attempt to comply with
the statute, and the term "disregard" includes any careless,
reckless, or intentional disregard. Sec. 6662(c). The penalty
does not apply to any portion of an underpayment for which there
was reasonable cause and with respect to which the taxpayer acted
in good faith. Sec. 6664(c). Respondent's determinations are
presumed correct, and petitioner bears the burden to prove she is
not liable for the accuracy-related penalties under section
6662(a). Rule 142(a); Neely v. Commissioner, 85 T.C. 934, 947
(1985); Bixby v. Commissioner, 58 T.C. 757, 791-792 (1972).
Petitioner conceded that she substantially underreported her
income from tips on her Federal income tax returns for 1989 and
1990. The record shows that petitioner maintained inadequate
records of her tip income for those years. Moreover, petitioner
admitted she did not check her income tax returns for accuracy.
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