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3. Accuracy-Related Penalties
Respondent also determined that petitioner is liable for
accuracy-related penalties under section 6662(a). In relevant
part, section 6662(a) and (b) imposes an accuracy-related penalty
if any portion of an underpayment is attributable to negligence
or disregard of rules or regulations. Negligence includes any
failure to make a reasonable attempt to comply with the
provisions of the internal revenue laws, any failure to exercise
ordinary and reasonable care in the preparation of a tax return,
and any failure to keep adequate books and records. Sec.
1.6662-3(b)(1), Income Tax Regs. Negligence has also been
defined as a lack of due care or a failure to do what a
reasonable and prudent person would do under similar
circumstances. Allen v. Commissioner, 925 F.2d 348, 353 (9th
Cir. 1991), affg. 92 T.C. 1 (1989). The term “disregard”
includes any careless, reckless, or intentional disregard of
rules or regulations. Sec. 1.6662-3(b)(2), Income Tax Regs.
Respondent bears the burden of production under section
7491(c) and must come forward with sufficient evidence indicating
that it is appropriate to impose an accuracy-related penalty.
Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). Once
respondent has met this burden, the taxpayer must come forward
with persuasive evidence that the accuracy-related penalty does
not apply. Id. The taxpayer may establish, for example, that
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