Michael G. Bunney - Page 13

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          evidence that any exception applies in this case.  Accordingly,             
          we sustain respondent’s determination as to the section 72(t)               
          additional tax.                                                             
          Issue 3.  Addition to Tax for Negligence.                                   
               Respondent determined that petitioner is liable for the                
          negligence accuracy-related penalty under section 6662(a).  That            
          section imposes an accuracy-related penalty equal to 20 percent             
          of the portion of an underpayment that is attributable to                   
          negligence.  Petitioner will avoid this penalty if the record               
          shows that he made a reasonable attempt to comply with the                  
          provisions of the Internal Revenue Code, and that he was not                
          careless, reckless, or in intentional disregard of rules or                 
          regulations.  See sec. 6662(c); Accardo v. Commissioner, 942 F.2d           
          444, 452 (7th Cir. 1991), affg. 94 T.C. 96 (1990); Drum v.                  
          Commissioner, T.C. Memo. 1994-433, affd. without published                  
          opinion 61 F.3d 910 (9th Cir. 1995).                                        
               Negligence connotes a lack of due care or a failure to do              
          what a reasonable and prudent person would do under the                     
          circumstances.  See Allen v. Commissioner, 92 T.C. 1 (1989),                
          affd. 925 F.2d 348 (9th Cir. 1991); Neely v. Commissioner, 85               
          T.C. 934, 947 (1985).  The negligence accuracy-related penalty is           
          inapplicable to any portion of an underpayment to the extent that           
          an individual has reasonable cause for that portion and acts in             
          good faith with respect thereto.  See sec. 6664(c)(1).  Such                

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