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III. Accuracy-Related Penalty Under Sec. 6662
Respondent determined that an accuracy-related penalty under
section 6662 applies to the entire underpayment13 in both the
1993 and 1994 taxable years, based on negligence or disregard of
rules or regulations. See sec. 6662(a) and (b)(1). Negligence
for this purpose includes any failure to make a reasonable
attempt to comply with the provisions of the Internal Revenue
Code, and disregard includes any careless, reckless, or
intentional disregard of rules or regulations. See sec. 6662(c);
sec. 1.6662-3(b), Income Tax Regs. “Negligence” has been further
defined as “a lack of due care or a failure to do what a
reasonable person would do under the circumstances.” Leuhsler v.
Commissioner, 963 F.2d 907, 910 (6th Cir. 1992), affg. T.C. Memo.
1991-179; see also Neely v. Commissioner, 85 T.C. 934, 947
(1985). Petitioners have the burden of proving error in
respondent’s determination that these penalties apply. See Rule
142(a); Leuhsler v. Commissioner, supra at 910. The accuracy-
related penalty under section 6662(a) does not apply, however, to
any portion of an underpayment if it is shown that there was
reasonable cause for such portion and that the taxpayer acted in
good faith. See sec. 6664(c)(1). Reliance on professional
13 For purposes of the instant case, the “underpayment” is
the same as the “deficiency” in each year. Compare sec. 6664(a)
with sec. 6211(a).
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