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provides that section 6662 shall apply to any underpayment
attributable to negligence or disregard of rules or regulations.
“Negligence” is defined as any failure to make a reasonable
attempt to comply with the provisions of the Internal Revenue
Code, and the term “disregard” includes any careless, reckless,
or intentional disregard. Sec. 6662(c). A position with respect
to an item is attributable to negligence if it lacks a reasonable
basis. See sec. 1.6662-3(b)(1), Income Tax Regs.
Section 6664(c)(1) provides that the penalty under section
6662(a) shall not apply to any portion of an underpayment if it
is shown that there was reasonable cause for the taxpayer’s
position with respect to that portion and that the taxpayer acted
in good faith with respect to that portion. The determination of
whether a taxpayer acted with reasonable cause and good faith
within the meaning of section 6664(c)(1) is made on a case-by-
case basis, taking into account all the pertinent facts and
circumstances. See sec. 1.6664-4(b)(1), Income Tax Regs.
Generally, the duty of filing an accurate return cannot be
avoided by placing the responsibility on a tax return preparer.
See Metra Chem Corp. v. Commissioner, 88 T.C. 654, 662 (1987).
Although a taxpayer remains liable for a deficiency attributable
to a return prepared by an accountant, a taxpayer who supplies a
qualified tax return preparer with all relevant information and
who reasonably and in good faith relies on the preparer’s advice
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Last modified: May 25, 2011