Mahendra K. Tandon - Page 30

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          Additions to Tax for Negligence                                             
               Respondent determined that petitioner is liable for                    
          additions to tax for negligence for 1986 and 1987 pursuant to               
          section 6653(a)(1)(A) and (B) and for 1988 pursuant to section              
          6653(a)(1).9  "Negligence" includes any failure to make a                   
          reasonable attempt to comply with the provisions of the Code, and           
          the term "disregard" includes any careless, reckless, or                    
          intentional disregard.  Sec. 6653(a)(3).  Furthermore, negligence           
          is the lack of due care or failure to do what a reasonable and              
          ordinarily prudent person would do under the circumstances.                 
          Neely v. Commissioner, 85 T.C. 934, 947 (1985).  Failure by a               
          taxpayer to keep adequate records may justify imposition of the             
          addition to tax for negligence.  See Lysek v. Commissioner, 583             
          F.2d 1088, 1094 (9th Cir. 1978), affg. T.C. Memo. 1975-293;                 
          Crocker v. Commissioner, 92 T.C. 899, 917 (1989).  Failure to               
          maintain adequate records also indicates disregard of the rules             
          or regulations that require a taxpayer to keep permanent records            
          sufficient to establish, inter alia, the taxpayer's gross income            
          and deductions.  See Crocker v. Commissioner, supra at 917.                 
          Petitioner has the burden of proving he is not liable for the               
          addition to tax.  Rule 142(a).                                              

               9  Respondent determined the additions to tax for negligence           
          on underpayments attributable to adjustments to income that were            
          not fraudulent; i.e., all the adjustments except for those                  
          related to the unreported income.                                           

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