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Petitioners stipulated that they did not file their tax
return for 1995 until October 21, 1996, the day on which
respondent received the return. Petitioners offered no evidence
showing that the failure to file was due to reasonable cause and
not due to willful neglect. Accordingly, we hold that
petitioners are liable for the addition to tax pursuant to
section 6651(a)(1).
D. Section 6662 Accuracy-Related Penalty
Section 6662 provides for an accuracy-related penalty equal
to 20 percent of the underpayment if the underpayment was due to
a taxpayer’s negligence or disregard of rules or regulations.
See sec. 6662(a) and (b)(1). A taxpayer is negligent when he or
she fails “‘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) (quoting Schrum v. Commissioner, 33
F.3d 426, 437 (4th Cir. 1994), affg. in part, vacating and
remanding in part T.C. Memo. 1993-124), affg. T.C. Memo. 1995-46.
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 keep
adequate books and records or to substantiate items properly.
See sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. A
taxpayer may, however, avoid the application of the accuracy-
related penalty by proving that he or she acted with reasonable
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