- 14 -
return”. For 1999, however, the notice computation mistakenly
fails to offset the Schedule A deductions “per exam”, which
include a $250 charitable contribution that had been reported on
petitioner’s 1999 Schedule A as filed, by the amount of that
deduction.6 Thus, the 1999 adjustment for increased Schedule A
deductions should be $22,985, not $23,235 as stated in the
notice.
C. Conclusion
The correction of the foregoing computational errors will be
reflected in the Rule 155 computation in this case.
IV. Accuracy-Related Penalty for 1997
A. Applicable Law
Section 6662 provides for an accuracy-related penalty (the
penalty) in the amount of 20 percent of the portion of any
underpayment attributable to, among other things, negligence or
intentional disregard of rules or regulations (without
distinction, negligence), any substantial understatement of
income tax, or any substantial valuation misstatement. See sec.
6662(b)(1)-(3). Respondent determined the penalty against
petitioner for 1997. Although the notice states that respondent
bases his imposition of the penalty upon “one or more” of the
three above-referenced grounds (and although the 1997
6 The amount shown as “per return” “total itemized
deductions” does not include the amount shown for
“contributions”, $250.
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