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petitioners’ $79,781 exclusion of 1999 wages and petitioners’
$99,980 exclusion of 2001 wages. Respondent further determined
in the notice that petitioners are liable for 1999 and 2001 for
the accuracy-related penalty under section 6662(a) because of:
(1) Negligence or disregard of rules or regulations under section
6662(b)(1) or (2) a substantial understatement of tax in peti-
tioners’ 2001 joint return under section 6662(b)(2).
OPINION
We must determine whether petitioners are liable for 2001
for the accuracy-related penalty under section 6662(a) because of
negligence under section 6662(b)(1) or a substantial understate-
ment of tax under section 6662(b)(2).7
Section 6662(a) imposes an accuracy-related penalty equal to
20 percent of the underpayment to which section 6662 applies.
Section 6662 applies to the portion of any underpayment which is
attributable to, inter alia, negligence, sec. 6662(b)(1), or a
substantial understatement of tax, sec. 6662(b)(2).
The term “negligence” in section 6662(b)(1) includes any
failure to make a reasonable attempt to comply with the Code.
See sec. 6662(c). Negligence has also been defined as a failure
to do what a reasonable person would do under the circumstances.
See Leuhsler v. Commissioner, 963 F.2d 907, 910 (6th Cir. 1992),
7Respondent concedes that petitioners are not liable for
1999 for the accuracy-related penalty under sec. 6662(a).
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