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B. Accuracy-related Penalty
Next, we consider whether petitioners are liable for the
accuracy-related penalty under section 6662(a).
Section 6662(a) and (b)(1) provides that if any portion of
an underpayment of tax is attributable to negligence or disregard
of rules or regulations, then there shall be added to the tax an
amount equal to 20 percent of the amount of the underpayment that
is so attributable. 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. Sec. 6662(c); see
sec. 1.6662-3(b)(2), Income Tax Regs. However, no penalty shall
be imposed with respect to any portion of an 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).
Applicable to court proceedings arising in connection with
examinations commencing after July 22, 1998, section 7491(c)
places on the Commissioner the burden of production with respect
to a taxpayer’s liability for any penalty or addition to tax.
See Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(a), (c)(1), 112 Stat. 685, 726,
727. However, the taxpayer still bears the burden of proving
that the negligence penalty is inapplicable. Rule 142(a);
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