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accuracy-related penalties for 1995 and 1996. Section 6662(a)
imposes an accuracy-related penalty in the amount of 20 percent
of the portion of an underpayment of tax attributable to
negligence or disregard of rules or regulations. Negligence is
any failure to make a reasonable attempt to comply with the
provisions of the internal revenue laws or to keep adequate books
and records or to substantiate items properly. Sec. 6662(c);
sec. 1.6662-3(b)(1), Income Tax Regs. Moreover, negligence is
the failure to exercise due care or the failure to do what a
reasonable and prudent person would do under the circumstances.
Neely v. Commissioner, 85 T.C. 934, 947 (1985). Disregard
includes any careless, reckless, or intentional disregard of
rules or regulations. Sec. 6662(c); sec. 1.6662-3(b)(2), Income
Tax Regs. No penalty will be imposed with respect to any portion
of any underpayment if it is shown that there was a reasonable
cause for such portion and that the taxpayer acted in good faith
with respect to such portion. Sec. 6664(c). This determination
is based on all the facts and circumstances. Sec. 1.6664-
4(b)(1), Income Tax Regs.
Petitioner presented no evidence regarding the section
6662(a) accuracy-related penalties. Petitioner failed to keep
adequate records necessary to document the alleged loan
transactions. Nor did petitioner provide other evidence to
substantiate the alleged loan transactions. Petitioner failed to
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