- -20
respondent's disallowance of the claimed deductions for travel
and entertainment expenses.
Also at issue is whether petitioner is liable for the
accuracy-related addition to tax under section 6662(a). Under
section 6662, a 20-percent addition to tax is imposed on the
portion of the underpayment that is attributable to one or more
of the following: (1) Negligence or disregard of the rules or
regulations; (2) substantial understatement of tax; (3) valuation
overstatement; (4) overstatement of pension liabilities; and (5)
estate or gift tax valuation understatements. Respondent
concedes that only negligence and substantial understatement of
tax would have application to the facts in this case.
Negligence includes any careless, reckless, or intentional
disregard of rules or regulations, any failure to make a
reasonable attempt to comply with the provisions of the law, and
any failure to exercise ordinary and reasonable care in the
preparation of a tax return. Neely v. Commissioner, 85 T.C. 934
(1985).
Based on the record, we find that petitioner has not met her
burden of showing that she and Mr. Velinsky were not negligent in
the preparation of their income tax return. It is clear from the
testimony of petitioner's return preparer that Mr. Velinsky's
records were inadequate to determine proper deductions and
expenses for the years at issue, and that he relied on the
information furnished to him by Mr. Velinsky. Petitioner's
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