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includes any careless, reckless or intentional disregard of rules
or regulations. Sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax
Regs. “‘[I]ntentional disregard occurs when a taxpayer who knows
or should know of a rule or regulation chooses to ignore its
requirements.’” Cramer v. Commissioner, 64 F.3d 1406, 1414 (9th
Cir. 1995)(quoting Hansen v. Commissioner, 820 F.2d 1464, 1469
(9th Cir. 1987)), affg. 101 T.C. 225 (1993).
By failing to report income and persistently refusing to
acknowledge their tax liability with respect to undisputed
revenues, despite self-professed familiarity with the tax laws,
petitioners have behaved unreasonably and have intentionally
disregarded the rules and regulations. These circumstances,
which are not disputed, demonstrate that respondent has satisfied
his burden of production under section 7491(c) for his
determination of the accuracy-related penalty based on negligence
or disregard of rules or regulations. Higbee v. Commissioner,
116 T.C. 438, 448-449 (2001). Accordingly, we sustain
respondent’s determination of the accuracy-related penalty under
section 6662(a).
By motion at the conclusion of trial, respondent requested
that the Court impose a penalty under section 6673(a). Section
6673(a)(1) authorizes this Court to require a taxpayer to pay to
the United States a penalty not in excess of $25,000 if, inter
alia, the taxpayer’s position in the proceeding is frivolous. A
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