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Advocate General (JAG) officer hired to help U.S. service
personnel living in Germany prepare their tax returns, who told
him that he was not liable for the AMT.
Section 6662(a) imposes an accuracy-related penalty of 20
percent on any portion of an underpayment of tax that is
attributable to items set forth in section 6662(b). Respondent
contends that petitioner was negligent with respect to his
understatement of tax. Negligence includes any careless,
reckless, or intentional disregard of rules and regulations, any
failure to make a reasonable attempt to comply with the
provisions of the law, and any failure to exercise ordinary and
reasonable care in the preparation of a tax return. See Zmuda v.
Commissioner, 731 F.2d 1417, 1422 (9th Cir. 1984), affg. 79 T.C.
714 (1982). To prevail on the issue of negligence, petitioner
must prove that his actions in connection with this transaction
were reasonable in light of his experience and business
sophistication. See Hoffpauir v. Commissioner, T.C. Memo.
1996-41; Avellini v. Commissioner, T.C. Memo. 1995-489. If a
taxpayer acts in good faith and with reasonable cause, he or she
will not be liable for the addition to tax for negligence. See
sec. 6664(c); Collins v. Commissioner, 857 F.2d 1383, 1386 (9th
Cir. 1988), affg. Dister v. Commissioner, T.C. Memo. 1987-217.
Petitioner has no tax or accounting background beyond helping
fellow service personnel read Internal Revenue Service forms.
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