- 21 -
On the record before us, we find that petitioners have
failed to establish that they are entitled to a deduction for the
taxable year 1998 for Mr. Horwath’s 1998 travel expenses.
Accuracy-Related Penalty
Respondent argues that petitioners are liable for each of
the taxable years at issue for the accuracy-related penalty under
section 6662(a) because of negligence or disregard of rules or
regulations under section 6662(b)(1) or a substantial understate-
ment of income tax under section 6662(b)(2).
Respondent has the burden of production under section
7491(c) with respect to the accuracy-related penalty under
section 6662(a).9 To meet that burden, respondent must come
forward with sufficient evidence indicating that it is appropri-
ate to impose the relevant penalty. Higbee v. Commissioner, 116
T.C. 438, 446 (2001).
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, reck-
less, 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.
Commissioner, 963 F.2d 907, 910 (6th Cir. 1992), affg. T.C. Memo.
1991-179; Antonides v. Commissioner, 91 T.C. 686, 699 (1988),
9See supra note 3.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011