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receivable accounts was not verified and further does not
constitute a bona fide debt. Accordingly, petitioner is not
entitled to the partnership loss deduction during the years in
issue. Respondent is sustained on this issue.
Accuracy-Related Penalty
Section 6662(a) imposes an accuracy-related penalty of 20
percent of the portion of the underpayment which is attributable
to negligence or disregard of 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 circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). The term “disregard” includes any careless, reckless, or
intentional disregard. Sec. 6662(c). No penalty shall be
imposed if it is shown that there was reasonable cause for the
underpayment and the taxpayer acted in good faith with respect to
the underpayment. Sec. 6664(c).
On the basis of the record, we find that petitioner has
failed to demonstrate that he was not negligent and did not
disregard rules or regulations. We hold that petitioner is
liable for the accuracy-related penalty under section 6662(a) for
each year in issue.
We have considered all arguments by the parties, and, to the
extent not discussed above, conclude that they are irrelevant or
without merit.
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Last modified: May 25, 2011