Tom I. Lincir and Diane C. Lincir - Page 11




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          underpayment (i.e., one that exceeds $1,000) in any taxable year            
          in which the understatement is "attributable to 1 or more tax               
          motivated transactions".  Petitioners bear the burden of proof as           
          to this issue.  See Rule 142(a); Boyd v. Commissioner, 101 T.C.             
          365, 373 (1993).                                                            
               In Seykota v. Commissioner, T.C. Memo. 1991-234,                       
          supplemented by T.C. Memo. 1991-541, we found that the FTI/Merit            
          transactions were tax-motivated transactions within the meaning             
          of section 6621(c).  We again made the same finding with respect            
          to the Merit T-bill and stock forward trades in Leema                       
          Enterprises, Inc. v. Commissioner, T.C. Memo. 1999-18.                      
          Petitioners have presented no evidence to show that these                   
          findings should not apply to them.  Accordingly, the additional             
          interest imposed by section 6621(c) is applicable to                        
          petitioners.5                                                               
          3.  Substantial Understatement of Tax Under Section 6661                    
               Respondent has determined additions to tax under section               
          6661 for 1982.  For returns due after December 31, 1982 (but                
          before January 1, 1990), section 6661 provides for an addition to           
          tax equal to 25 percent of the amount of any underpayment                   
          attributable to a substantial understatement.  An understatement            


          5    The First Stipulation of Facts recites that some of the                
          deficiencies at issue related to the Dorchester project, as                 
          opposed to the FTI/Merit programs.  In a stipulation filed July             
          1, 1992, however, the parties agreed that petitioners were                  
          entitled to only 25 percent of the claimed deductions relating to           
          the Dorchester project and, further, that any underpayments                 
          attributable to Dorchester transactions were attributable to                
          "tax-motivated transactions" within the scope of sec. 6621(c).              

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