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respondent's agents. Petitioners followed that advice, and the
notice of deficiency followed in due course.4
As noted above, the deficiencies are no longer in dispute.
Petitioners contend they should be absolved of liability for the
section 6662 penalties because they relied on the representations
of their return preparer.
Section 6662(a) provides for an accuracy-related penalty
equal to 20 percent of any portion of an underpayment of tax
required to be shown on the return that is attributable to the
taxpayer's negligence or disregard of rules or regulations. Sec.
6662(a) and (b)(1). Negligence consists of any failure to make a
reasonable attempt to comply with the provisions of the Internal
Revenue Code and disregard consists of any careless, reckless, or
intentional disregard. Sec. 6662(c). The courts have refined
the Code definition of negligence as a lack of due care or
failure to do what a reasonable and prudent person would do under
similar circumstances. Allen v. Commissioner, 925 F.2d 348, 353
(9th Cir. 1991), affg. 92 T.C. 1 (1989). Section 1.6662-3(b)(1),
Income Tax Regs., provides that "Negligence is strongly indicated
where * * * a taxpayer fails to make a reasonable attempt to
ascertain the correctness of a deduction * * * on a return which
4 This case is one of numerous cases heard by the Court
involving tax returns prepared by Mr. Beltran, which essentially
involve the same deductions. At some point in the audit process,
Mr. Beltran ceased all communications with his former clients.
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