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intentional disregard of rules or regulations.10 Petitioner
assigns error to respondent’s determination.
In the case of an underpayment of tax required to be shown
on a return, section 6662(a) and (b)(1) imposes a penalty in the
amount of 20 percent of the portion of the underpayment that is
attributable to negligence or intentional disregard of the rules
or regulations (hereafter, simply, negligence). Negligence has
been defined as lack of due care or failure to do what a
reasonable and prudent person would do under like circumstances.
E.g., Hofstetter v. Commissioner, 98 T.C. 695, 704 (1992).
Negligence 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 Regs. Section 6664(c)(1) provides
that the accuracy-related penalty shall not be imposed with
respect to any portion of an underpayment if it is shown that the
taxpayer acted in good faith and that there was reasonable cause
for the underpayment. The determination of whether a taxpayer
acted in good faith and with reasonable cause is made on a case-
by-case basis, taking into account all pertinent facts and
10 In his notice of deficiency, respondent also seeks to
impose the penalty on the ground that there was a substantial
understatement of tax under sec. 6662(b)(2). On brief, however,
respondent has not pursued that argument. We, therefore,
consider him to have abandoned it. See Bernstein v.
Commissioner, 22 T.C. 1146, 1152 (1954), affd. 230 F.2d 603 (2d
Cir. 1956); Lime Cola Co. v. Commissioner, 22 T.C. 593, 606
(1954); Roberts v. Commissioner, T.C. Memo. 1996-225.
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