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less probable than it would be without the evidence.” While
certain of the exhibits and stipulated facts are given little to
no weight in our finding of ultimate facts in this case, we hold
that the exhibits and stipulated facts meet the threshold
definition of “relevant evidence” under Federal Rule of Evidence
401, and that the exhibits and stipulated facts therefore are
admissible under Federal Rule of Evidence 402. Accordingly, to
the extent that the Court did not overrule the relevancy
objections at trial, we do so here.
II. The Section 6662(a) Accuracy-Related Penalty
Section 6662(a) imposes an addition to tax of 20 percent on
the portion of an underpayment attributable to any one of various
factors, one of which is “negligence or disregard of rules or
regulations”. Sec. 6662(a) and (b)(1). “Negligence” includes
any failure to make a reasonable attempt to comply with the
provisions of the Internal Revenue Code, and “disregard of rules
or regulations” includes any careless, reckless, or intentional
disregard. Sec. 6662(c). The regulations under section 6662
provide that negligence is strongly indicated where: A taxpayer
fails to make a reasonable attempt to ascertain the correctness
of a deduction, credit or exclusion on a return which would seem
to a reasonable and prudent person to be “too good to be true”
under the circumstances * * * . Sec. 1.6662-3(b)(1)(ii), Income
Tax Regs.
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