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Section 6662 imposes a penalty equal to 20 percent of the
part of the underpayment of tax that is attributable to
negligence. Sec. 6662(a) and (b)(1). For purposes of section
6662, negligence is a failure to reasonably attempt to comply
with the provisions of the Internal Revenue Code. Sec. 6662(c).
Negligence is defined as "'lack of due care or failure to do what
a reasonable and ordinarily prudent person would do under the
circumstance.'" Neely v. Commissioner, 85 T.C. 934, 947 (1985)
(quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th Cir.
1967)). A taxpayer has the burden of proving that the
Commissioner's determination of an addition to tax is in error.
Luman v. Commissioner, 79 T.C. 846, 860-861 (1982).
The accuracy-related penalty under section 6662(a) does not
apply to any part of an underpayment if the taxpayer shows that
there is reasonable cause for that part of the underpayment and
that the taxpayer acted in good faith based on the facts and
circumstances. Sec. 6664(c)(1).
In petitioners' closing statement and posttrial brief, they
argue that they are not liable for the penalties because of their
reasonable and good faith efforts, citing Lyons v. Commissioner,
T.C. Memo. 1991-84. In Lyons, the taxpayers had a reasonable
system for maintaining financial records and preparing their tax
returns. In addition, the taxpayers had a relationship with an
accountant who prepared their returns. While many of the
relevant records were unavailable to the taxpayers, the Court
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