Jan and Corinne Mejnartowicz - Page 7

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          2.  Negligence                                                              
               Section 6662(a) imposes a penalty with respect “to any                 
          portion of an underpayment of tax required to be shown on a                 
          return” in an amount “equal to 20 percent of the portion of the             
          underpayment to which this section applies.”  Section 6662                  
          applies, inter alia, to underpayments attributable to negligence            
          or disregard of rules or regulations.  Sec. 6662(b)(1).                     
          “Negligence” includes any failure to make a reasonable attempt to           
          comply with the provisions of the Internal Revenue Code, and                
          “disregard” includes any careless, reckless, or intentional                 
          disregard.  Sec. 6662(c).  Also, “‘Negligence is a lack of due              
          care or the failure to do what a reasonable and ordinarily                  
          prudent person would do under the circumstances.’”  Freytag v.              
          Commissioner, 89 T.C. 849, 887 (1987) (quoting Marcello v.                  
          Commissioner, 380 F.2d 499, 506 (5th Cir. 1967), affg. on this              
          issue 43 T.C. 168 (1964) and T.C. Memo. 1964-299), affd. 904 F.2d           
          1011 (5th Cir. 1990), affd. on other grounds 501 U.S. 868 (1991).           
          The question then is whether petitioners’ conduct meets the                 
          reasonably prudent person standard.  See id.                                
               Petitioner made no attempt to keep records of his plumbing             
          and heating business as required.  Moreover, he claimed                     
          deductions for legal expenses and utilities that were, by his own           
          admission, clearly improper.  We sustain respondent’s imposition            
          of the section 6662(a) penalty.                                             

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