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IRA. Accordingly, the Court sustains respondent's determination
as to this issue.
Respondent also determined that a section 6662 accuracy-
related penalty is due with respect to petitioners' tax return
for 1999.
Section 6662(a) imposes a penalty of 20 percent of the
portion of the underpayment attributable to negligence or
disregard of rules or regulations. See sec. 6662(a) and (b)(1).
Negligence is defined as any failure to make a reasonable attempt
to comply with the provisions of the Internal Revenue Code, and
the term "disregard" includes any careless, reckless, or
intentional disregard. Sec. 6662(c).
Pursuant to section 7491(c), respondent bears the burden of
production with respect to a section 6662 penalty. In order to
meet respondent's burden of production, respondent must come
forward with sufficient evidence indicating that it is
appropriate to impose the accuracy-related penalty in this case.
Higbee v. Commissioner, 116 T.C. 438, 446 (2001). However, the
accuracy-related penalty does not apply if petitioners
demonstrate that there was reasonable cause for the underpayment
and that they acted in good faith with respect to the
underpayment. See sec. 6664(c). Whether taxpayers acted with
reasonable cause and good faith depends on the pertinent facts
and circumstances. See McCallson v. Commissioner, T.C. Memo.
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