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the omission of the $30,000 withdrawal from petitioner’s
retirement account. Respondent did not apply the accuracy-
related penalty to the $3,900 depreciation adjustment.
Respondent, in his answer, conceded that petitioners are not
liable for the accuracy-related penalty with respect to the
omission from income of the $30,000 withdrawal from petitioner’s
retirement account.
Section 6662(a) imposes a 20-percent accuracy-related
penalty if any portion of an underpayment is attributable to
negligence or disregard of rules or regulations or any
substantial understatement of tax. Negligence is a lack of due
care or failure to do what reasonable and prudent persons would
do under the circumstances. Marcello v. Commissioner, 380 F.2d
499, 506 (5th Cir. 1967), affg. in part and remanding in part on
another issue 43 T.C. 168 (1964).
No penalty is imposed if it is shown that the taxpayer had
reasonable cause and acted in good faith. Sec. 6664(c). A
taxpayer may be considered to have good faith or to be reasonable
if he relied on his accountant or attorney and that reliance was
reasonable. See United States v. Boyle, 469 U.S. 241, 251
(1985). Petitioners contend that they relied on attorneys with
respect to their pursuit of their daughter’s domestic relations
litigation, but there is no showing that petitioners relied on
professionals for their reporting position where they claimed the
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