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regarding these penalties are substantially similar, and,
accordingly, we combine our discussion of whether respondent’s
determination should be sustained.
Negligence has been defined as “the lack of due care or the
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); Zmuda v. Commissioner,
731 F.2d 1417, 1422 (9th Cir. 1984), affg. 79 T.C. 714 (1982).
Negligence includes the “failure to make a reasonable attempt to
comply with the provisions [of the Internal Revenue Code]” and/or
to exercise ordinary and reasonable care in the preparation of a
tax return. Secs. 6653(a)(3), 6662(c); sec. 1.6662-3(b)(1),
Income Tax Regs. “Disregard” includes any careless, reckless, or
intentional disregard. Secs. 6653(a)(3), 6662(c); sec. 1.6662-
3(b)(2), Income Tax Regs.
The accuracy-related penalty under section 6662 does not
apply with respect to any portion of an underpayment for which
there was reasonable cause and the taxpayer acted in good faith.
Sec. 6664(c)(1). Whether a taxpayer acted with reasonable cause
depends on the facts and circumstances. Sec. 1.6664-4(b)(1),
Income Tax Regs. The most important factor to be considered is
the extent of the taxpayer’s efforts to determine the proper
income tax liability. Id. With respect to 1987 and 1988,
section 6653(a)(1) provides that the 5-percent addition to tax
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