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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). This penalty 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).
Petitioners put forth no evidence from which we could
conclude they were not negligent or that reasonable cause existed
for the failure to report income or for the disallowed items. In
fact, petitioner admitted at trial that he did not report all his
income and he did not explain this failure. We sustain
respondent's determination on this issue.
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