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respect to such underpayment. See sec. 6664(c). Whether the
taxpayer acted with reasonable cause and in good faith is
determined by the relevant facts and circumstances. The most
important factor is the extent of the taxpayer’s effort to assess
the proper tax liability. See Stubblefield v. Commissioner, T.C.
Memo. 1996-537; sec. 1.6664-4(b)(1), Income Tax Regs. Section
1.6664-4(b)(1), Income Tax Regs., specifically provides:
“Circumstances that may indicate reasonable cause and good faith
include an honest misunderstanding of fact or law that is
reasonable in light of all of the facts and circumstances,
including the experience, knowledge, and education of the
taxpayer.” See Neely v. Commissioner, 85 T.C. 934 (1985).
A taxpayer is generally charged with knowledge of the law.
See Niedringhaus v. Commissioner, 99 T.C. 202, 222 (1992).
Ignorance of the law is not always a defense to the imposition of
section 6662(a). A taxpayer must take reasonable steps to
determine the law and apply it. See id.
It is the taxpayer’s responsibility to establish that he or
she is not liable for the accuracy-related penalty imposed by
section 6662(a). See Rule 142(a); Tweeddale v. Commissioner, 92
T.C. 501, 505 (1989).
Petitioner argues that he relied on the 1997 version of IRS
Publication 17 (Tax Guide for Individuals). The section
regarding loans is as follows:
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