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deduction. The correct amounts will be recomputed under Rule
155.
As noted, respondent determined an accuracy-related penalty
under section 6662(a) in the amount of $2,226. Section 6662(a)
imposes an accuracy-related penalty of 20 percent on any portion
of an underpayment of tax that is attributable to items set forth
in section 6662(b). Section 6662(b)(1) provides that section
6662(a) is to apply to any portion of an underpayment
attributable to negligence or disregard of rules or regulations.
Section 6662(b)(2) applies section 6662(a) to any substantial
understatement of income tax.
Section 6662(c) defines negligence to include any failure to
make a reasonable attempt to comply with the provisions of the
Internal Revenue Code, and defines "disregard" to include any
careless, reckless, or intentional disregard of rules or
regulations. Petitioner was an accountant who knew that he was
not entitled to reduce his gross receipts by returns and
allowances when he had not taken the sales price of the returned
items into his income. Thus, we find and hold that petitioner
demonstrated negligence or disregard of rules or regulations.
There is a substantial understatement of income tax if the
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