- 39 -
one or more of the items set forth in section 6662(b). Respon-
dent determined that the Wangs are liable for accuracy-related
penalties pursuant to section 6662 for 1989, 1990, and 1991; EIC,
for 1989-1992. Respondent asserts that the section 6662 penal-
ties are due to either a substantial understatement of tax or
negligence or disregard of the rules or regulations. Sec.
6662(b)(1) and (2). Petitioners bear the burden of proving that
respondent's determination is erroneous and that they are not
liable for the accuracy-related penalties. Rule 142(a);
Bixby v. Commissioner, 58 T.C. 757, 791 (1972).
The term "negligence" includes a failure to make a rea-
sonable attempt to comply with the provisions of the internal
revenue laws. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax
Regs. Negligence has also been defined as a lack of due care or
failure to do what a reasonable person would do under the circum-
stances. Norgaard v. Commissioner, 939 F.2d 874, 880 (9th Cir.
1991), affg. in part and revg. in part on other grounds T.C.
Memo. 1989-390; Allen v. Commissioner, 925 F.2d 348, 353 (9th
Cir. 1991), affg. 92 T.C. 1 (1989). "Disregard" includes any
careless, reckless, or intentional disregard of rules or regula-
tions. Sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax Regs. With
respect to individuals, an understatement of tax is substantial
if it exceeds the greater of 10 percent of the tax required to be
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