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Section 6662(a) provides for an accuracy-related penalty in
the amount of 20 percent of the portion of an underpayment of tax
attributable to, among other things, negligence or disregard of
rules or regulations. Sec. 6662(a) and (b)(1). Negligence is
defined to include any failure to make a reasonable attempt to
comply with the provisions of the internal revenue laws. Sec.
6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. Moreover,
negligence is the failure to exercise due care or the failure to
do what a reasonable and prudent person would do under the
circumstances. Neely v. Commissioner, 85 T.C. 934, 947 (1985).
Disregard is defined to include any careless, reckless, or
intentional disregard of rules or regulations. Sec. 6662(c);
sec. 1.6662-3(b)(2), Income Tax Regs.
Clearly, by purposely not paying his taxes, petitioner has
not behaved as a reasonable and prudent person. Petitioner has
shown an intentional disregard of the rules and regulations. We
uphold the imposition of the accuracy-related penalties under
section 6662(a) for the underpayments of the 1994 and 1995 tax
liabilities.
We grant respondent’s motion for a penalty under section
6673. Under section 6673, this Court may award a penalty to the
United States of up to $25,000 when the proceeding has been
instituted or maintained by the taxpayer primarily for delay or
if the taxpayer’s position in such proceeding is frivolous or
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Last modified: May 25, 2011