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which relate to arguments generally raised by protesters, the
merits of which need not be addressed here. Suffice it to say
that petitioner has not established that respondent's adjustments
are in error. Therefore, the adjustments referred to and
described as issues 2 and 3 are sustained.
The final issue is whether petitioner is liable for the
accuracy-related penalty under section 6662(a) for negligence or
disregard of rules or regulations for the year 1997. Section
6662(a) provides that, if it is applicable to any portion of an
underpayment in taxes, there shall be added to the tax an amount
equal to 20 percent of the portion of the underpayment to which
section 6662 applies. Section 6662(b)(1) provides that section
6662 shall apply to any underpayment attributable to negligence
or disregard of rules or regulations.
Section 6662(c) provides that the term "negligence" includes
any failure to make a reasonable attempt to comply with the
provisions of the Internal Revenue laws, and the term "disregard"
includes any careless, reckless, or intentional 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). 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
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