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imposes an accuracy-related penalty in the amount of 20 percent
of the portion of the underpayment of tax attributable to
negligence or disregard of rules or regulations. See sec.
6662(b)(1). Negligence is any failure to make a reasonable
attempt to comply with the provisions of the Internal Revenue
laws and includes any failure by the taxpayer to keep adequate
books and records or to substantiate items properly. 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. No penalty will be imposed with
respect to any portion of an underpayment if it is shown that
there was reasonable cause for such portion and that the taxpayer
acted in good faith with respect to such portion. See sec.
6664(c).
On the basis of the record, we conclude that petitioner is
liable for the accuracy-related penalties under section 6662(a).
Petitioner claimed various deductions for expenses that he could
not substantiate. Indeed, petitioner claimed a Schedule C,
Profit or Loss From Business, loss in the amount of $30,319 for
the 2000 taxable year, but later he conceded that he was not
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