- 16 -
1986), affg. T.C. Memo. 1984-601. Because petitioner has not
established that any portion of the underpayment is not
attributable to fraud, we hold that she is liable for the fraud
penalty on the entire amount of the underpayment.
Negligence For 1991 and 1992
Should the Court determine that petitioner is not liable for
the addition to tax for fraud, respondent alleges that she is
liable for the accuracy-related penalty for negligence for the
years 1991 and 1992. Section 6662(a) imposes a penalty equal to
20 percent of the portion of the underpayment of tax shown to be
attributable to negligence or intentional disregard of rules or
regulations.
Negligence includes "any failure to reasonably attempt to
comply with the tax code, including the lack of due care or the
failure to do what a reasonable or ordinarily prudent person
would do under the circumstances." Chamberlain v. Commissioner,
66 F.3d 729, 732 (5th Cir. 1995), affg. in part and revg. in part
T.C. Memo. 1994-228. Generally, courts look both to the
underlying investment and to the taxpayer's position taken on the
return in evaluating whether a taxpayer was negligent. Sacks v.
Commissioner, 82 F.3d 918, 920 (9th Cir. 1996), affg. T.C. Memo.
1994-217.
Under some circumstances, however, a taxpayer may avoid
liability for the accuracy-related penalty for negligence if
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