- 9 -
On this record, we conclude that petitioners are liable for
an addition to tax under section 6651(a)(1) for failure to timely
file their 1993 return. Petitioners failed to establish that
they timely filed their 1993 return. In fact, the stipulation is
to the contrary. Petitioners did not establish that failure to
timely file was due to reasonable cause and not willful neglect.
Thus, petitioners are liable for the section 6651(a)(1) addition
to tax for 1993.
Finally, we must decide whether petitioners are liable for
accuracy-related penalties for 1993 and 1994. Section 6662(a)
imposes an accuracy-related penalty in the amount of 20 percent
of the portion of an underpayment of tax attributable to
negligence or disregard of rules or regulations. Sec. 6662(a)
and (b)(1). Negligence is any failure to make a reasonable
attempt to comply with the provisions of the internal revenue
laws. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs.
Moreover, negligence is the failure to exercise due care or the
failure to do what a reasonable and prudent person would do under
the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). Disregard includes any careless, reckless, or
intentional disregard of rules or regulations. Sec. 6662(c);
sec. 1.6662-3(b)(2), Income Tax Regs. No penalty will be imposed
with respect to any portion of any underpayment if it is shown
that there was a reasonable cause for such portion and that the
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