- 31 - Respondent determined accuracy-related penalties for negligence under section 6662(a) in the amounts of $2,457 and $2,450 for 1989 and 1990, respectively. These penalties arose from disallowed deductions. Respondent asserted by amended pleadings an additional $15,182 to the accuracy-related penalty for 1990. Respondent based this additional penalty on unreported income from 1990. While petitioner bears the burden of proof as to the penalties as determined by respondent in the deficiency notice, respondent bears the burden of proof under Rule 142(a) for the additional penalty. Negligence, for the purpose of section 6662(a), includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Sec. 6662(c). Petitioner destroyed books and records needed to prove its net operating losses, failed to maintain records necessary to substantiate its deductions, and mixed up the nondeductible mileage of one car with the deductible mileage of another. Petitioner is liable for negligence to the extent that the deductions that we have denied result in an underpayment for each of the years in issue. With respect to the additional penalty for 1990, however, respondent has failed to prove negligence. Petitioner's subsidiary, Far Western, an accrual basis taxpayer, performed services for its client, IML, sometime in the mid-1980s. ThePage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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