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with the provisions of the Internal Revenue Code. Sec. 6662(c).
“Disregard” consists of any careless, reckless, or intentional
disregard. Id.
An exception applies to the accuracy-related penalty when
the taxpayer demonstrates (1) there was reasonable cause for the
underpayment, and (2) he or she acted in good faith with respect
to such underpayment. See sec. 6664(c). Whether the taxpayer
acted with reasonable cause and in good faith is determined by
the relevant facts and circumstances. The most important factor
is the extent of the taxpayer’s effort to assess the proper tax
liability. See Stubblefield v. Commissioner, T.C. Memo. 1996-
537; sec. 1.6664-4(b)(1), Income Tax Regs. Section 1.6664-
4(b)(1), Income Tax Regs., specifically provides in part:
“Circumstances that may indicate reasonable cause and good faith
include an honest misunderstanding of fact or law that is
reasonable in light of the experience, knowledge and education of
the taxpayer.”
It is the taxpayer’s responsibility to establish he or she
is not liable for the accuracy-related penalty imposed by section
6662(a). See Rule 142(a). Petitioners failed to explain
adequately why they did not report all of their income for 1995.
On the basis of the entire record, we conclude that petitioners
have not established that the underpayment of tax was due to
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