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B. Negligence Addition to Tax Under Section 6653
Section 6653(a), applicable to petitioner’s 1987 and 1988
taxable years, authorizes the imposition of an addition to tax
for negligence. It provides that, if any part of any
underpayment is due to negligence or disregard of rules or
regulations, an addition equal to the sum of 5 percent of the
underpayment and, for 1987, an amount equal to 50 percent of the
interest payable under section 6601 with respect to the portion
of such underpayment attributable to negligence for the period
from the underpayment due date to the assessment date (or if
earlier, the tax payment date) shall be added to the tax. For
purposes of section 6653(a), negligence is defined to include
“any failure to make a reasonable attempt to comply with the
provisions of this title”, and disregard is defined to include
“any careless, reckless, or intentional disregard.” Sec.
6653(a)(3).
Respondent contends that petitioner is liable for the
section 6653(a) addition to tax for negligence “because she
failed to use reasonable care in ascertaining and reporting her
tax liabilities” for 1987 and 1988. Specifically, respondent
argues that petitioner is liable for the addition to tax because
she “failed to keep adequate accounting records and claimed a
large NOL deduction with little or no support.” Respondent does
not argue, however, that petitioner’s failure to file timely
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