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the experience, knowledge and education of the taxpayer.”
Moreover, a taxpayer is generally charged with knowledge of the
law. Niedringhaus v. Commissioner, 99 T.C. 202, 222 (1992).
Although a taxpayer is not subject to the addition to tax for
negligence where the taxpayer makes honest mistakes in complex
matters, the taxpayer must take reasonable steps to determine the
law and to comply with it. Id.
The Court holds that petitioner acted negligently with
respect to the underpayment in this case. “‘Negligence’ * * *
includes any failure by the taxpayer to keep adequate books and
records or to substantiate items properly.” Sec. 1.6662-3(b),
Income Tax Regs. Petitioner failed to keep adequate books and
records. In light of his filing history and the conclusions with
respect to the gold mining activity, it is clear that petitioner
made no honest attempt to determine the correctness of his
deductions. Respondent is sustained on this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
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