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As to the other disallowed Schedule C expense, petitioner
presented no evidence to substantiate that expense. Respondent,
therefore, is sustained on that item.
Issue 5. Accuracy-Related Penalty
We have found that petitioner deducted $1,910 that he paid
for real estate taxes and that he also claimed the same expense
as home mortgage interest, and that he claimed deductions for
items that he could not substantiate. Furthermore, petitioner
conceded that he received $17 of unreported interest income.
Respondent determined that petitioner is liable for the
accuracy-related penalty for negligence or intentional disregard
of rules or regulations pursuant to section 6662.
Section 6662 provides for the imposition of a penalty equal
to 20 percent of the portion of the underpayment which is
attributable to negligence or disregard of rules or regulations.
See sec. 6662(a) and (b)(1). For purposes of this section, the
term "negligence" includes any failure to make a reasonable
attempt to comply with the internal revenue laws, a failure to
exercise ordinary and reasonable care in the preparation of a tax
return, or a failure to keep adequate books and records or to
substantiate items properly. Sec. 1.6662-3(b)(1), Income Tax
Regs. Negligence is defined as a lack of due care or failure to
do what a reasonable and ordinarily prudent person would do under
the circumstances. See Neely v. Commissioner, 85 T.C. 934, 947
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