Big Hong Ng - Page 31

               Negligence is defined as the failure to exercise the due care          
          that a reasonable, prudent person would exercise under similar              
          circumstances.  Zmuda v. Commissioner, 731 F.2d 1417, 1422 (9th             
          Cir. 1984), affg. 79 T.C. 714 (1982); Neely v. Commissioner, 85             
          T.C. 934, 947 (1985).  A taxpayer has the burden of proving that            
          respondent's determination is in error.  Luman v. Commissioner, 79          
          T.C. 846, 860-861 (1982).                                                   
               We are satisfied, and thus find, that the entire underpayment          
          is due to Ms. Ng's negligence and intentional disregard of the              
          Federal income tax rules and regulations.  Ms. Ng failed to                 
          maintain adequate records.  She commingled her personal funds with          
          funds of entities she controlled.  She misrepresented material              
          facts to the revenue agent on more than one occasion.  She                  
          concealed large amounts of taxable income on which she did not pay          
          tax. She concealed ownership of property.  We therefore hold that           
          Ms. Ng is liable for the additions to tax for negligence on the             
          entire underpayment for each of the years 1986 through 1988, and            
          for the accuracy-related penalty on the entire underpayment for             
          1989, excluding the amount by which any of the underpayments is to          
          be reduced in accordance with our findings herein.                          
               Section 6651(a)(1) provides for a 5-percent addition to tax            
          for each month a return is not filed, unless due to reasonable              
          cause, with a maximum addition to tax of 25 percent.  Because Ms.           
          Ng did not timely file her returns, section 6651(a)(1) applies to           
          each of the years under consideration.                                      

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