-9-
v. Commissioner, supra at 447. Once respondent meets his burden
of production, petitioner must come forward with evidence
sufficient to persuade the Court that respondent's determination
is incorrect. Id. Petitioner also bears the burden of proof
with regard to issues of reasonable cause, substantial authority,
or similar provisions. Id. at 446.
Section 6662(a) imposes a penalty of 20 percent of the
portion of the underpayment which is attributable to, inter alia,
negligence or disregard of rules or regulations. Sec.
6662(b)(1). Negligence is 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)). The term "disregard" includes any careless,
reckless, or intentional disregard. Sec. 6662(c).
No penalty shall be imposed if it is shown that there was
reasonable cause for the underpayment and the taxpayer acted in
good faith with respect to the underpayment. Sec. 6664(c). The
determination of whether a taxpayer acted with reasonable cause
and in good faith is made on a case-by-case basis, taking into
account all pertinent facts and circumstances. The most
important factor is the extent of the taxpayer's effort to assess
the taxpayer's proper tax liability. "Circumstances that may
indicate reasonable cause and good faith include an honest
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