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disregard.” Sec. 6662(c). “Negligence” also includes any
failure by a taxpayer to keep adequate books and records or to
substantiate items properly. Sec. 1.6662-3(b), Income Tax Regs.
An accuracy-related penalty is not imposed with respect to
any portion of the underpayment as to which the taxpayer acted
with reasonable cause and in good faith. Sec. 6664(c)(1); see
Higbee v. Commissioner, supra at 448. This determination is made
based on all the relevant facts and circumstances. Higbee v.
Commissioner, supra at 448; sec. 1.6664-4(b)(1), Income Tax Regs.
“Relevant factors include the taxpayer’s efforts to assess his
proper tax liability, including the taxpayer’s reasonable and
good faith reliance on the advice of a professional such as an
accountant.” Higbee v. Commissioner, supra at 448-449.
Petitioner has failed to keep or produce adequate records.
Respondent has provided sufficient evidence to meet his burden of
production. Petitioner has not produced evidence to prove that
respondent’s determination of negligence is incorrect. We hold
that petitioner is liable for the accuracy-related penalty under
section 6662.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011