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Following our review of the record, we are unpersuaded that
either MIC or Beverly exercised ordinary business care and
prudence in an attempt to file its tax returns timely. We hold
that MIC and Beverly are liable for these additions, and we
sustain respondent's determination of the applicability of these
additions. The amount of these additions is left to be computed
under Rule 155.
Respondent also determined that MIC is liable for
accuracy-related penalties under section 6662. Section 6662
imposes a penalty equal to 20 percent of the underpayment
attributable to negligence. MIC bears the burden of proving
respondent wrong. Rule 142(a); Welch v. Helvering, 290 U.S. 111,
115 (1933); see also Bixby v. Commissioner, 58 T.C. 757, 791-792
(1972). MIC must prove that it was not negligent; i.e., it made
a reasonable attempt to comply with the provisions of the Code,
and that it was not careless, reckless, or in intentional
disregard of rules or regulations. Sec. 6662(c).
Respondent determined that MIC was liable for an
accuracy-related penalty in each year with respect to 100 percent
of the deficiency. MIC conceded the correctness of certain of
respondent' adjustments in this case, and it has failed to prove
that the penalty does not apply to any deficiencies attributable
to the conceded items. We hold that MIC has failed to meet its
burden or proof, and we sustain respondent's determination on the
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