It matters in determining if the accuracy penalty applies when negotiating with the IRS. Section 6662(c) and Reg. §1.6662-3(b) provide the following definitions and guidance.

Negligence includes any failure to make a reasonable attempt to comply with the rules or regulations or to exercise ordinary and reasonable care in the preparation of a tax return.

It also includes any failure by the taxpayer to keep adequate books and records or to substantiate items properly.

Negligence Is Strongly Indicated Where:

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