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We now must decide whether petitioners are liable for the
accuracy-related penalty under section 6662(a). Respondent, for
both of the taxable years, determined an accuracy-related
penalty, based on negligence, under section 6662(a). That
section imposes an addition to tax in the amount of 20 percent of
any portion of the underpayment attributable to negligence or the
disregard of rules or regulations. See sec. 6662(a) and (b)(1).
Petitioners must show that respondent’s determination is
erroneous. See Rule 142(a).
The term “negligence” includes any failure to make a
reasonable attempt to comply with the provisions of the tax laws,
and the term “disregard” includes any careless, reckless, or
intentional disregard. Sec. 6662(c). Negligence has also been
defined as a lack of due care or failure to do what a reasonable
person would do under the circumstances. See Allen v.
Commissioner, 925 F.2d 348, 353 (9th Cir. 1991), affg. 92 T.C. 1
(1989); Neely v. Commissioner, 85 T.C. 934, 947-948 (1985). To
avoid this penalty, petitioners must show that their actions were
reasonable and not careless, reckless, or made with intentional
disregard of rules or regulations. See Delaney v. Commissioner,
743 F.2d 670 (9th Cir. 1984), affg. T.C. Memo. 1982-666.
Taxpayers are expected to maintain adequate records, and failure
to do so may constitute negligence and a disregard of rules or
regulations. See sec. 6001.
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