An accuracy-related penalty applies to the portion of tax underpayment attributable to:
I.
Negligence or a disregard of the tax rules or regulations.
II.
Any substantial understatement of income tax.
II only.
Both I and II.
I only.
Neither I nor II.
Choice "B" is correct. Accuracy-related penalties apply to the portion of tax underpayments attributable to negligence or disregard of tax rules and regulations as well as to any substantial understatement of income tax.
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