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regulations. Section 6653(a)(1)(B) imposes a further addition to
tax in an amount equal to 50 percent of the interest payable with
respect to the portion of the underpayment which is attributable
to negligence or disregard of rules or regulations. For 1988,
section 6653(a)(1) only provides for the 5-percent addition to
tax. For purposes of section 6653(a)(1), the term "negligence"
includes any failure to make a reasonable attempt to comply with
the provisions of the Code, and the term "disregard" includes any
careless, reckless, or intentional disregard. Sec. 6653(a)(3).
Negligence also has been defined as a lack of due care or the
failure to do what a reasonable and ordinarily prudent person
would do under the circumstances. See Crocker v. Commissioner,
92 T.C. 899, 916 (1989); Neely v. Commissioner, 85 T.C. 934,
947-948 (1985). Failure by a taxpayer to keep adequate records
may justify imposition of the addition to tax for negligence.
See Lysek v. Commissioner, 583 F.2d 1088, 1094 (9th Cir. 1978),
affg. T.C. Memo. 1975-293; Crocker v. Commissioner, supra at 917.
Failure to maintain adequate records also indicates disregard of
the rules or regulations that require a taxpayer to keep
permanent records sufficient to establish, inter alia, the
taxpayer's gross income and deductions. See Crocker v.
Commissioner, supra at 917. Respondent only asserts the
additions to tax for negligence to the extent that Schedule E
expenses are disallowed. Petitioners failed to keep or maintain
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