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See sec. 6662(a) and (b)(1). For purposes of section 6662, the
term "negligence" includes any failure to make a reasonable
attempt to comply with the provisions of the internal revenue
laws, a failure to exercise ordinary and reasonable care in the
preparation of a tax return, or a failure to keep adequate books
and records or to substantiate items properly. Sec. 1.6662-
3(b)(1), Income Tax Regs. The term "disregard" includes any
careless, reckless, or intentional disregard of rules or
regulations. Sec. 6662(c).
Negligence is defined as a lack of due care or failure to do
what a reasonable and ordinarily prudent person would do under
the circumstances. See Neely v. Commissioner, 85 T.C. 934, 947
(1985) (quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th
Cir. 1967), affg. in part and remanding in part 43 T.C. 168
(1964)).3 In determining whether petitioners were negligent in
failing to report the gain from the sale of the property, we take
into account petitioner's years of business experience. See
Sutor v. Commissioner, 17 T.C. 64, 69 (1951); Glenn v.
Commissioner, T.C. Memo. 1995-399, affd. without published
opinion 103 F.3d 129 (6th Cir. 1996).
3In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th
Cir. 1981) (en banc), the Court of Appeals for the Eleventh
Circuit, the court to which an appeal in this case would lie,
adopted as binding precedent all the decisions of the former
Court of Appeals for the Fifth Circuit handed down prior to the
close of business on Sept. 30, 1981.
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