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reasonable and ordinarily prudent person would do under the
circumstances." Neely v. Commissioner, 85 T.C. 934, 947 (1985).
The accuracy-related penalty under section 6662(a) does not apply
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).
In this case, petitioners were negligent. For each of the
taxable years in issue, petitioners failed to report interest
income, Schedule C income, and rental income. In addition,
petitioners failed to maintain adequate records to substantiate
Schedule C expenses and rental deductions claimed on their
return. Thus, the record adequately demonstrates that
petitioners were "careless" and did not make a "reasonable"
attempt to comply with the provisions of the Internal Revenue
Code.
By Mr. Terrell's testimony, petitioners contend that they
are not liable for the accuracy-related penalty under section
6662(a) for any of the years in issue because they relied on
their tax return preparer, Mr. Still, to prepare their returns
accurately. In the circumstances petitioners' responsibility of
filing accurate tax returns "cannot be avoided by placing
responsibility on an agent." Pritchett v. Commissioner, 63 T.C.
149, 174 (1974). In the case of alleged reliance upon an
accountant who prepared the taxpayer's return, a taxpayer may
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