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any further amount of gross receipts that should be shifted to or
from any of the years.9
Negligence Addition and Penalty
If any part of any underpayment of tax required to be shown
on a return is due to negligence (or disregard of rules or
regulations), section 6653(a)(1) imposes an addition to tax equal
to 5 percent of the entire underpayment. Section 6653(c) defined
"underpayment" for this purpose. For purposes of section
6653(a), the term "negligence" includes any failure to make a
reasonable attempt to comply with the provisions of the Internal
Revenue Code. Sec. 6653(a)(3). Respondent has determined that
petitioner's deficiency for taxable year ended July 31, 1989, was
due to negligence.
Section 6662 imposes a penalty on any portion of an
underpayment of tax attributable to negligence or disregard of
rules or regulations. Sec. 6662(a) and (b)(1). For purposes of
section 6662, just as for section 6653, negligence includes any
failure to make a reasonable attempt to comply with the internal
revenue laws. Sec. 6662(c). Section 6664 defines "underpayment"
9 Petitioner has never asked to be relieved of the
stipulation but instead argued that the stipulation merely
combined the gross receipts of petitioner and No. 2. That is not
correct. While petitioner did not cooperate during the pretrial
period and has never submitted any substantiation for any amount
of gross receipts that should be shifted from one year to
another, respondent's counsel offered at trial to consider any
documentation petitioner submitted. Respondent's counsel no
doubt would again extend her gracious offer during the Rule 155
proceedings.
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