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Accuracy-Related Penalty
Respondent determined that petitioner is liable for an
accuracy-related penalty for its 1992 and 1994 taxable years
under section 6662(a). That section imposes a penalty in the
amount of 20 percent of any portion of the underpayment
attributable to negligence or disregard of rules or regulations.
Negligence is the 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). The negligence penalty will apply if, among other
things, the taxpayer fails to maintain adequate books and records
with regard to the items in question. See Crocker v.
Commissioner, 92 T.C. 899, 917 (1989).
Respondent determined that petitioner was liable for the
penalty on the entire underpayment in each of the years under
consideration. Petitioner failed to address the accuracy-related
penalty in its brief and presented no evidence at trial as to why
its actions were reasonable. Accordingly, petitioner has failed
to show that its actions were reasonable and not careless, and
not made with intentional disregard of rules or regulations, and
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