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did not result from willful neglect and that the failure was due
to reasonable cause. See United Stated v. Boyle, 469 U.S. 241,
245 (1985). To prove reasonable cause, a taxpayer must show that
he or she exercised ordinary business care and prudence but
nevertheless could not file the return when it was due. See
Crocker v. Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-
1(c)(1), Proced. & Admin. Regs.
Petitioners have presented neither evidence nor argument as
to why they did not file their 1996 tax return timely. Instead,
petitioners argue that, because the settlement proceeds are
excludable from gross income, the related addition to tax under
section 6651(a) must not be allowed.
As we concluded, supra, petitioners must include the entire
settlement amount in gross income. Because petitioners have not
shown that their failure to file timely was due to reasonable
cause, respondent’s determination with respect to the addition to
tax under section 6651(a)(1) is sustained.
Under section 6662(a), a taxpayer may be liable for a
penalty of 20 percent on the portion of an underpayment of tax
attributable to a substantial understatement of tax or due to
negligence or disregard of the rules or regulations. Sec.
6662(b). Whether the penalty is applied because of a substantial
understatement of tax or negligence or disregard of the rules or
regulations, the accuracy-related penalty is not imposed with
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