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Section 6662(a)
The Muhichs
Respondent determined the Muhichs are liable for the
accuracy-related penalty under section 6662(a) and (b)(1) for
both years in issue. This section imposes a penalty equal to 20
percent of the portion of an underpayment that is attributable
to, among other things, negligence. Petitioners will avoid this
penalty if the record shows that they were not negligent; i.e.,
they made a reasonable attempt to comply with the provisions of
the Internal Revenue Code, and they were not careless, reckless,
or in intentional disregard of rules or regulations. See sec.
6662(c); Accardo v. Commissioner, 942 F.2d 444, 452 (7th Cir.
1991), affg. 94 T.C. 96 (1990); Drum v. Commissioner, T.C. Memo.
1994-433, affd. without published opinion 61 F.3d 910 (9th Cir.
1995). Negligence connotes a lack of due care or a failure to do
what a reasonable and prudent person would do under the
circumstances. See Allen v. Commissioner, 92 T.C. 1 (1989),
affd. 925 F.2d 348 (9th Cir. 1991); Neely v. Commissioner, 85
T.C. 934, 947 (1985). The accuracy-related penalty of section
6662 is not applicable to any portion of an underpayment to the
extent that an individual has reasonable cause for that portion
and acts in good faith with respect thereto. See sec.
6664(c)(1). Such a determination is made by taking into account
all facts and circumstances, including the experience and
knowledge of the taxpayer and his or her reliance on a
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