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in petitioners’ favor, that the aircraft parts in question are
depreciable over a 5-year recovery period.
Accuracy-Related Penalty
Respondent determined in the notice that petitioners are
liable for the accuracy-related penalty under section 6662(a) for
each of the years 1993 and 1994 because their underpayment of tax
for each of those years was due to negligence or disregard of
rules or regulations.
For purposes of section 6662(a), the term “negligence”
includes any failure to make a reasonable attempt to comply with
the Code, and “disregard” includes any careless, reckless, or
intentional disregard. See sec. 6662(c). Negligence has also
been defined as a lack of due care or failure to do what a
reasonable person would do under the circumstances. See Leuhsler
v. Commissioner, 963 F.2d 907, 910 (6th Cir. 1992), affg. T.C.
Memo. 1991-179; Antonides v. Commissioner, 91 T.C. 686, 699
(1988), affd. 893 F.2d 656 (4th Cir. 1990).
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). The determination of
whether the taxpayer acted with reasonable cause and in good
faith depends on the pertinent facts and circumstances. See sec.
1.6664-4(b)(1), Income Tax Regs. The most important factor is
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