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system to evade taxes known to be owing. Respondent has shown
that at least some part of the underpayment for each 1996 and
1997 is attributable to fraud. Furthermore, because
Mr. Richardson has failed to show that any portion of the
underpayments upon which the section 6663 penalty was computed
was not due to fraud, respondent is sustained as to this issue
with respect to both years.
V. Section 6662 Accuracy-Related Penalty
Subsection (a) of section 6662 imposes an accuracy-related
penalty in the amount of 20 percent of any underpayment that is
attributable to causes specified in subsection (b). Subsection
(b)(1) of section 6662 then provides that among the causes
justifying imposition of the penalty is negligence or disregard
of rules or regulations.
“Negligence” is defined in section 6662(c) as “any failure
to make a reasonable attempt to comply with the provisions of
this title”, and “disregard” as “any careless, reckless, or
intentional disregard.” Caselaw similarly states that
“‘Negligence is a lack of due care or the failure to do what a
reasonable and ordinarily prudent person would do under the
circumstances.’” Freytag v. Commissioner, 89 T.C. 849, 887
(1987) (quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th
Cir. 1967), affg. on this issue 43 T.C. 168 (1964) and T.C. Memo.
1964-299), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S.
868 (1991). Pursuant to regulations, “‘Negligence’ also includes
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