Walter E. Hess and Helen L. Hess - Page 20

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          1993.  Section 6662 imposes an accuracy-related penalty equal to            
          20 percent of any portion of an underpayment of tax that is                 
          attributable to negligence or disregard of rules or regulations.            
          See sec. 6662(a) and (b).  The term "negligence" means "any                 
          failure to make a reasonable attempt to comply with the                     
          provisions of [the Code]".  Sec. 6662(c).  This includes any                
          failure to exercise due care or to do what a reasonable and                 
          ordinarily prudent person would do under the circumstances.                 
          See Rybak v. Commissioner, 91 T.C. 524, 565 (1988); Neely v.                
          Commissioner, 85 T.C. 934, 947 (1985).  The term "disregard"                
          includes any careless, reckless, or intentional disregard.                  
          Sec. 6662(c).                                                               
               Petitioner must prove respondent's determination of                    
          negligence wrong.  Rule 142(a); Bixby v. Commissioner, 58 T.C.              
          757, 791 (1972).  Petitioner's complete argument against this               
          penalty is:  "As the foregoing discussion and Proposed Findings             
          demonstrate, * * * [petitioner] had a solid basis for * * * [his]           
          tax position.  No grounds exist for imposing penalties under IRC            
          � 6662(a)."  We disagree; we are unable to find that petitioner             
          had a solid basis for his positions herein.  Petitioner is a                
          sophisticated and longtime businessman who holds a business                 
          degree from Duke University.  Yet he deliberately painted his               
          settlement agreement with Balfour to appear that he received the            
          settlement payment for a personal injury although he knew that              
          the payment was intended to compensate him for taxable                      

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