- 25 - Dr. Beck’s Liability for Accuracy-Related Penalties Respondent contends that for each year in issue Dr. Beck is liable for the section 6662(a) accuracy-related penalty. Section 6662(a) imposes a 20-percent penalty on any portion of an underpayment that is attributable to, among other things, negligence or disregard of the rules or regulations. Sec. 6662(b)(1). Negligence is the lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the same circumstances. Neely v. Commissioner, 85 T.C. 934 (1985). No penalty shall be imposed under section 6662(a) with respect to any portion of an underpayment if it is shown that there was reasonable cause and that the taxpayer acted in good faith. Sec. 6664(c). Dr. Beck failed to produce evidence to substantiate the deductions he claimed on his Schedules C and F. His failure to maintain and to produce records of his business activities shows not only negligence but intentional disregard of rules and regulations requiring a taxpayer to keep permanent records sufficient to establish his gross income and deductions. See Crocker v. Commissioner, 92 T.C. 899, 917 (1989); Schroeder v. Commissioner, 40 T.C. 30, 34 (1963). Dr. Beck has come forward with no evidence to establish that he acted in good faith. As previously discussed, Dr. Beck’s claims that office cleaning people accidentally discarded all his business records are not credible. Dr. Beck is liable for thePage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011