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Section 666212 imposes an accuracy-related penalty if any
part of an underpayment of tax is due to negligence or
intentional disregard of the rules. See subsecs. (a) and (b)(1)
of sec. 6662. Negligence is lack of due care or failure to do
what a reasonable and ordinarily prudent person would do under
the circumstances. See sec. 6662(c); Neely v. Commissioner, 85
T.C. 934, 947 (1985). Negligence also includes any failure by
the taxpayer to keep adequate books and records or to
substantiate items properly. See sec. 1.6662-3(b)(1), Income Tax
Regs.
12Sec. 6662 provides, in pertinent part, as follows:
SEC. 6662. IMPOSITION OF ACCURACY-RELATED PENALTY.
(a) Imposition of Penalty.--If this section applies to
any portion of an underpayment of tax required to be shown
on a return, there shall be added to the tax an amount equal
to 20 percent of the portion of the underpayment to which
this section applies.
(b) Portion of Underpayment to Which Section Applies.--
This section shall apply to the portion of any underpayment
which is attributable to 1 or more of the following:
(1) Negligence or disregard of rules or
regulations.
* * * * * * *
(c) Negligence.--For purposes of this section, the term
“negligence” includes any failure to make a reasonable
attempt to comply with the provisions of this title [title
26, the Internal Revenue Code], and the term “disregard”
includes any careless, reckless, or intentional disregard.
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