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to negligence or intentional disregard of rules or regulations.
With respect to each of the years in issue, an “underpayment” is
defined, as applicable in this case, to be equal to the amount of
any deficiency. Sec. 6653(c)(1).
Negligence is defined as the “lack of due care or failure to
do what a reasonable and ordinarily prudent person would do under
the circumstances.” Neely v. Commissioner, 85 T.C. 934, 947
(1985) (quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th
Cir. 1967), affg. in part and remanding in part on another ground
43 T.C. 168 (1964)); see Allen v. Commissioner, 925 F.2d 348, 353
(9th Cir. 1991), affg. 92 T.C. 1 (1989). Negligence is
determined by testing a taxpayer’s conduct against that of a
reasonable, prudent person. Zmuda v. Commissioner, 731 F.2d
1417, 1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982). Courts
generally look both to the underlying investment and to the
taxpayer’s position taken on the return in evaluating whether a
taxpayer was negligent. Sacks v. Commissioner, 82 F.3d 918, 920
(9th Cir. 1996), affg. T.C. Memo. 1994-217.
The Commissioner’s decision to impose the negligence
addition to tax is presumptively correct. Collins v.
Commissioner, 857 F.2d 1383, 1386 (9th Cir. 1988), affg. Dister
v. Commissioner, T.C. Memo. 1987-217; Hansen v. Commissioner, 820
F.2d 1464, 1469 (9th Cir. 1987). A taxpayer has the burden of
proving that respondent’s determination is erroneous and that she
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