- 15 - underpayment respondent determined appears, on its face, to be a “substantial understatement” within the meaning of section 6662(d)(1)), the only issue respondent raised on brief is whether petitioner’s 1997 underpayment is attributable to “negligence or disregard of rules or regulations.”7 Section 6662(c) defines the term “negligence”, for purposes of section 6662, as including “any failure to make a reasonable attempt to comply with the provisions of this title”, and the term “disregard” as including “any careless, reckless, or intentional disregard.” Negligence has been generally defined as lack of due care or failure to do what a reasonably prudent person would do under like circumstances. See, e.g., Hofstetter v. Commissioner, 98 T.C. 695, 704 (1992). It “also includes any failure by the taxpayer to keep adequate books and records or to substantiate items properly.” Sec. 1.6662-3(b)(1), Income Tax Regs. Section 6664(c)(1) provides that the accuracy-related penalty shall not be imposed with respect to any portion of an underpayment if it is shown that there was reasonable cause for that portion and the taxpayer acted in good faith with respect to that portion. 7 Therefore, we consider respondent to have abandoned the substantial understatement argument. See Bernstein v. Commissioner, 22 T.C. 1146, 1152 (1954), affd. 230 F.2d 603 (2d Cir. 1956); Lime Cola Co. v. Commissioner, 22 T.C. 593, 606 (1954); Roberts v. Commissioner, T.C. Memo. 1996-225.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011