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Accuracy-Related Penalties
Respondent determined that Delaware Corporation is liable
for each of the years 1994 and 1997, that Ms. Havens is liable
for each of the years 1994 and 1995, and that Mr. Barber is
liable for each of the years 1994 and 1995 for the accuracy-
related penalty under section 6662(a) because of: (1) Negligence
under section 6662(b)(1) or (2) a substantial understatement of
income tax under section 6662(b)(2).
Section 6662(a) imposes an accuracy-related penalty equal to
20 percent of the underpayment of tax resulting from, inter alia,
negligence or disregard of rules or regulations, sec. 6662(b)(1),
or a substantial understatement of income tax, sec. 6662(b)(2).
For purposes of section 6662(a), the term “negligence” includes
any failure to make a reasonable attempt to comply with the Code,
and the term “disregard” includes any careless, reckless, or
intentional disregard. Sec. 6662(c). Negligence has also been
defined as a lack of care or failure to do what a reasonable
person would do under the circumstances. Leuhsler v. Commis-
sioner, 963 F.2d 907, 910 (6th Cir. 1992), affg. T.C. Memo.
1991-179; Antonides v. Commissioner, 91 T.C. 686, 699 (1988),
affd. 893 F.2d 656 (4th Cir. 1990). An understatement is equal
to the excess of the amount of tax required to be shown in the
tax return over the amount of tax shown in the tax return, sec.
6662(d)(2)(A), and is substantial (1) in the case of an individ-
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