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taxpayer bears the burden of supplying sufficient evidence to
persuade the Court that the Commissioner’s determination is
incorrect. Id. at 447.
Section 6662(a) provides an accuracy-related penalty equal
to 20 percent of the underpayment required to be shown on a
return due to negligence or disregard of rules or regulations.
Sec. 6662(b)(1). For purposes of section 6662, the term
“negligence” includes “any failure to make a reasonable attempt
to comply with the provisions of * * * [the Code], and the term
‘disregard’ includes any careless, reckless, or intentional
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.
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Last modified: November 10, 2007