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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). “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.
Negligence is defined as the “‘lack of due care or failure
to do what a reasonable or ordinarily prudent person would do
under the circumstances.’” Neely v. Commissioner, 85 T.C. 934,
947 (1985) (quoting Marcello v. Commissioner, 380 F.2d 499, 506
(5th Cir. 1967), affg. in part and remanding in part on another
ground 43 T.C. 168 (1964)); see Anderson v. Commissioner, 62 F.3d
1266, 1271 (10th Cir. 1995), affg. T.C. Memo. 1993-607.
Negligence is determined by testing a taxpayer’s conduct against
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