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rules and regulations. Sec. 6653(a)(1)(A) and (B). An
underpayment for purposes of this section is the excess of the
amount of tax required to be shown on the return over the amount
of tax shown on the return, except that where a return is not
filed within the prescribed time period any amount of tax shown
on the return is disregarded. Sec. 6653(c)(1). Negligence is
defined as the lack of due care or failure to do what an
ordinarily prudent person would do under the circumstances.
Marcello v. Commissioner, 380 F.2d 494, 506 (5th Cir. 1967),
affg. in part and revg. and remanding in part 43 T.C. 168 (1964).
The failure to file timely returns without reasonable cause and
the failure to maintain adequate records to substantiate the
taxpayer's income and deductions each constitute negligence or
disregard of rules and regulations. Sullivan v. Commissioner,
985 F.2d 704, 706 (2d Cir. 1993), affg. in part and revg. in part
on another issue T.C. Memo. 1991-492; Crocker v. Commissioner, 92
T.C. 899, 917 (1989); Emmons v. Commissioner, 92 T.C. 342, 349
(1989), affd. 898 F.2d 50 (5th Cir. 1990).
The addition to tax under section 6661 applies to any
underpayment of tax that is attributable to a substantial
understatement. An understatement is generally defined as the
excess of the amount of tax required to be shown on the return
over the amount of tax shown on the return. Sec. 6661(b)(2)(A).
If no valid return is filed for the taxable year, the amount of
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