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Accuracy-Related Penalty
In the notice of deficiency, respondent determined that
petitioner was liable for the accuracy-related penalty under
section 6662(a) on the ground that the entire deficiency was
attributable to (1) negligence or disregard of rules or
regulations and (2) substantial understatement of income tax.
See sec. 6662(b)(1) and (2). "[T]he term 'negligence' includes
any failure to make a reasonable attempt to comply with the
provisions of * * * [the Internal Revenue Code], and the term
'disregard' includes any careless, reckless, or intentional
disregard." Sec. 6662(c). A substantial understatement is an
understatement of tax that exceeds the greater of 10 percent of
the tax required to be shown on the return or $5,000. Sec.
6662(d). Petitioner will be relieved of the accuracy-related
penalty under either theory if there was reasonable cause and
petitioner acted in good faith. Sec. 6664(c). Petitioner has
the burden of proof to show reasonable cause and good faith.
Rule 142(a). Petitioner argues that even if we uphold
respondent's deficiency determination, he is not liable for the
accuracy-related penalty because he reasonably relied on his
accountants. See Chamberlain v. Commissioner, 66 F.3d 729, 732-
733 (5th Cir. 1995), affg. in part and revg. in part T.C. Memo.
1994-228. For the reasons underlying our conclusion that
petitioner did not intend to create bona fide indebtedness,
discussed above, we also conclude that petitioner's reliance on
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