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1992-394. There is no indication in the record that the amounts
disallowed were for clothing that could not be worn in an
ordinary way. Respondent’s determinations are sustained.
5. Negligence.--Respondent determined that the omission
from income of the so-called “gifts” and the deductions claimed
on the Schedule C were due to negligence and that the penalty
under section 6662(a) is applicable. 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.
See 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). Negligence also 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. 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),
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