- 13 - to his trade or business rather than primarily personal in nature. Accordingly, on this record, the Court holds that petitioner is not entitled to the Schedule C deduction for travel, meals, and entertainment expenses. The final issue is whether petitioner is liable for the accuracy-related penalty under section 6662(a) for negligence or disregard of rules or regulations. Section 6662(a) provides that, if it is applicable to any portion of an underpayment in taxes, there shall be added to the tax an amount equal to 20 percent of the portion of the underpayment to which section 6662 applies. Section 6662(b)(1) provides that section 6662 shall apply to any underpayment attributable to negligence or disregard of rules or regulations. Section 6662(c) provides that the term "negligence" includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue laws, and the term "disregard" includes any careless, reckless, or intentional disregard of rules or regulations. Negligence is the lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the circumstances and includes any failure to keep adequate books and records or to substantiate items properly. Neely v. Commissioner, 85 T.C. 934, 947 (1985); sec. 1.6662- 3(b)(1), Income Tax Regs. However, under section 6664(c), no penalty shall be imposed under section 6662(a) with respect to any portion of anPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011