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return that is attributable to the taxpayer's negligence or
disregard of rules or regulations. See sec. 6662(a) and (b)(1).
"Negligence" consists of any failure to make a reasonable attempt
to comply with the provisions of the Internal Revenue Code. Sec.
6662(c). "Disregard" consists of any careless, reckless, or
intentional disregard. Id.
An exception applies to the accuracy-related penalty when
the taxpayer demonstrates (1) there was reasonable cause for the
underpayment, and (2) he acted in good faith with respect to such
underpayment. See sec. 6664(c). Whether the taxpayer acted with
reasonable cause and in good faith is determined by the relevant
facts and circumstances. The most important factor is the extent
of the taxpayer's effort to assess the proper tax liability. See
Stubblefield v. Commissioner, T.C. Memo. 1996-537; sec. 1.6664-
4(b)(1), Income Tax Regs. Section 1.6664-4(b)(1), Income Tax
Regs., specifically provides:
Circumstances that may indicate reasonable cause and
good faith include an honest misunderstanding of fact
or law that is reasonable in light of the experience,
knowledge and education of the taxpayer. * * *
It is the taxpayer's responsibility to establish he is not
liable for the accuracy-related penalty imposed by section
6662(a). See Rule 142(a); Tweeddale v. Commissioner, 92 T.C.
501, 505 (1989). Petitioners failed to explain adequately why
they did not report all of their taxable income for 1993 and
1994. On the basis of the entire record, we conclude that
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