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Section 6662 imposes an accuracy-related penalty equal to 20
percent of the portion of the underpayment attributable to
negligence or disregard of rules or regulations. "Negligence"
means any failure to make a reasonable attempt to comply with the
provisions of the Internal Revenue Code, and "disregard" means any
careless, reckless, or intentional disregard. Sec. 6662(c); see
also Neely v. Commissioner, 85 T.C. 934, 947 (1985).
No accuracy-related penalty is imposed with respect to any
portion of the understatement in which the taxpayer acted with
reasonable cause and in good faith. Sec. 6664(c)(1).
Mr. Rungrangsi testified that he relied on his accountants in
preparing the tax returns for the years in issue. However, he did
not establish that he provided his accountants with all the
information necessary for them to prepare petitioners' returns
properly. Petitioners' accountants did not testify at trial, and
the parties stipulated that petitioners did not have any books or
records reflecting the income or expenses of Stanton Mexicatessen
for the years in issue.
Reliance on an accountant to prepare tax returns is not
sufficient by itself to establish reasonable cause. See Metra Chem
Corp. v. Commissioner, 88 T.C. 654, 662 (1987). The taxpayer must
also show that he supplied the tax preparer with complete and
accurate information so that the return could be properly prepared,
an incorrect return was the result of the tax preparer's mistakes,
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