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III. Negligence Penalty
Section 6662 imposes an accuracy-related penalty equal to 20
percent of any underpayment attributable to negligence. The term
"negligence" is defined as the failure to exercise the due care
that a reasonable and ordinarily prudent person would exercise
under the 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). Where the taxpayer is a
tax attorney, he may be held to a higher standard of
reasonableness than a person lacking in tax expertise. Tippin v.
Commissioner, 104 T.C. 518, 534 (1995). Because respondent
initially raised the penalty in an amendment to her answer,
respondent bears the burden of proof. Rule 142(a).
Petitioner's deductions clearly were not allowable under
relevant statutes and case law. As a result, we conclude that
petitioner, an experienced tax attorney, did not exercise the
care that an ordinarily prudent tax attorney would have exercised
under the circumstances.
We have considered all other arguments made by the parties
and found them to be either irrelevant or without merit.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011