-31-
would do under the circumstances. See Neely v. Commissioner, 85
T.C. 934, 947 (1985). It includes the failure to make a reason-
able attempt to comply with the Internal Revenue Code. See sec.
6662(c). In claiming deductions for expenses related to his
writing activity, petitioner has failed to establish his
entitlement to certain expenses. On the basis of the record,
though, we are satisfied that petitioner's underpayment for 1993
was not due to negligence but, rather, solely to an honest
misunderstanding of the law. Petitioner has demonstrated that he
made a reasonable attempt to comply with the internal revenue
laws. He had sought the advice of Internal Revenue Service
representatives and of professional tax preparers on how to
deduct expenses incurred as an author. Petitioner was a credible
witness, and it is our opinion that he acted reasonably and in
good faith. For these reasons, we decline to impose the
negligence penalty for 1993.
For 1994, the deficiency notice determined an accuracy-
related penalty against petitioner for the substantial under-
statement of income tax. Respondent did not pursue the matter at
the trial or on brief, and we presume that respondent has aban-
doned it. Accordingly, we hold for petitioner on this issue.
To reflect the foregoing,
Decision will be entered under
Rule 155.
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