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Section 6662(a) and (b)(1) impose a penalty equal to 20
percent of any portion of an underpayment attributable to
negligence or disregard of rules or regulations. Petitioner
bears the burden of proving that he is not liable for this
penalty. Rule 142(a); Luman v. Commissioner, 79 T.C. 846, 860-
861 (1982).
Negligence is defined as the lack of due care or failure to
do what a reasonable and prudent person would do under the
circumstances. Neely v. Commissioner, 85 T.C. 934, 947 (1985).
The term "disregard" includes any careless, reckless, or
intentional disregard. Sec. 6662(c). Section 6664(c)(1)
provides that no penalty shall be imposed under section 6662(a)
with respect to any portion of an underpayment if it is shown
that there was a reasonable cause for such portion and the
taxpayer acted in good faith with respect thereto. Whether the
taxpayer acted with reasonable cause and in good faith is
determined on a case-by-case basis taking into account all of the
pertinent facts and circumstances. Holowinski v. Commissioner,
T.C. Memo. 1997-168; Remy v. Commissioner, T.C. Memo. 1997-72;
sec. 1.6664-4(b)(1), Income Tax Regs.
If a taxpayer reasonably relies in good faith upon the
advice of a competent and experienced accountant in the
preparation of the taxpayer's return, the penalty for negligence
or disregard of rules or regulations is not applicable. Weis v.
Commissioner, 94 T.C. 473, 487 (1990); Conlorez Corp. v.
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Last modified: May 25, 2011