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underpayment attributable to negligence or disregard of rules or
regulations.
Negligence is defined as a lack of due care or failure to do
what a reasonable and ordinarily prudent person would do under
the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). Negligence includes any failure to make a reasonable
attempt to comply with the law. Secs. 6653(a)(3), 6662(c).
Respondent’s determination that petitioners’ underpayment was due
to negligence is presumptively correct and must stand unless
petitioners can establish that they were not negligent. Hall v.
Commissioner, 729 F.2d 632, 635 (9th Cir. 1984), affg. T.C. Memo.
1982-337.
In the instant case, petitioner admitted that he did not
keep records with respect to his business activities. As stated
earlier, a taxpayer is required to maintain records sufficient to
establish the amount of his or her income and deductions. We
find that in keeping no records of his business activities,
petitioner failed to make any reasonable attempt to comply with
the law. We find further that the underpayment of tax for the
years at issue is due to petitioner’s failure to do what a
reasonable and ordinarily prudent person would do under like
circumstances.
Petitioners presented no sufficient evidence to rebut
respondent’s determination that the underpayment of tax for the
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Last modified: May 25, 2011