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related penalties pursuant to section 6662(a) for taxable years
2002 and 2003.
Section 6662(a) provides for an accuracy-related penalty of
20 percent of the portion of any underpayment attributable to,
among other things, negligence or intentional disregard of rules
or regulations. Sec. 6662(b)(1). Negligence means a
“‘failure to make a reasonable attempt to comply with the
provisions of the Internal Revenue Code, or the failure to do
what a reasonable and 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 43 T.C. 168
(1964) and T.C. Memo. 1964-299). Negligence also includes the
failure by the taxpayer to keep adequate books and records. Sec.
1.6662-3(b)(1), Income Tax Regs. No accuracy-related penalty may
be imposed on any portion of an underpayment if it is shown that
there was “reasonable cause” for such portion and that the
taxpayer acted in “good faith” with respect to such portion.
Sec. 6664(c)(1). The determination of whether a taxpayer acted
in good faith is made on a case-by-case basis, taking into
account all pertinent facts and circumstances. Sec. 1.6664-4(b),
Income Tax Regs. The most important factor is the extent of the
taxpayer’s efforts to determine his or her proper tax liability.
Id.
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