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attributable to negligence or disregard of rules or regulations.6
Sec. 6662(a), (b)(1) and (2). “Negligence” is any failure to make
a reasonable attempt to comply with the provisions of the
internal revenue laws. See sec. 6662(c); sec. 1.6662-3(b)(1),
Income Tax Regs. Moreover, negligence is the failure to exercise
due care or the failure to do what a reasonable and prudent
person would do under the circumstances. Neely v. Commissioner,
85 T.C. 934, 947 (1985). “Disregard” includes any careless,
reckless, or intentional disregard of rules or regulations. See
sec. 6662(c); sec. 1.6662-3(b)(2), Income Tax Regs.
Notwithstanding section 6662(a), no penalty will be imposed with
respect to any portion of an underpayment if it is shown that
there was “a reasonable cause for such portion and that the
taxpayer acted in good faith with respect to such portion.” Sec.
6664(c)(1).
Respondent determined that petitioners are liable for an
accuracy-related penalty attributable to negligence or disregard
of rules and regulations.
On the basis of the record, we conclude that petitioners
made a reasonable attempt to comply with the Internal Revenue
6 Other types of underpayments that may give rise to the
imposition of an accuracy-related penalty under sec. 6662(a) and
(b) do not apply in this case. Respondent did not present
evidence that there was either a substantial or gross “valuation
misstatement” under sec. 6662(b)(3), (e), and (h), and we did not
make any conclusions as to the value of the expropriated
properties. See supra note 5.
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