- 15 - V. For 1991, is Petitioner Liable for the Negligence Penalty With Respect to Omitted Interest Income, a Claimed Loss From the Sale of a Taxi, or Unsubstantiated Business Deductions? On his delinquently filed 1991 return, petitioner claimed a $1,490 loss from the sale or involuntary conversion of a taxi. In the notice of deficiency, respondent determined an $84 accuracy-related negligence penalty under section 6662 attributable to those two items for 1991. Respondent also determined, as an alternative to the fraud penalty for 1991, that petitioner was liable for an accuracy-related negligence penalty under section 6662(b)(1) or (c). Because we have decided that petitioner is not liable for the fraud penalty for 1991, we consider whether petitioner is liable for the negligence penalty with respect to unsubstantiated Schedule C business deductions for 1991. Section 6662 provides that if any portion of any underpayment is due to negligence, then a taxpayer will be liable for a penalty equal to 20 percent of the underpayment of tax required to be shown on the return that is attributable to the taxpayer’s negligence. See sec. 6662(a) and (b)(1). Negligence is defined as the “lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the circumstances.” Korshin v. Commissioner, 91 F.3d 670, 672 (4th Cir. 1996). As pertinent here, “negligence” includes the failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code and also includes any failure to keepPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011