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substantial if it exceeds the greater of 10 percent of the tax
required to be shown on the return or $5,000. Sec.
6661(b)(1)(A).
If a taxpayer has substantial authority for his tax
treatment of any item on the return, the understatement is
reduced by the amount of tax attributable to that item. Sec.
6661(b)(2)(B)(i). Similarly, the amount of understatement is
reduced by the tax attributable to any item adequately disclosed
either on the taxpayer's return or in a statement attached to the
return. Sec. 6661(b)(2)(B)(ii).
Petitioners have not shown that there was either substantial
authority for their position with respect to any of the items not
conceded by respondent, or that there was adequate disclosure of
any of these items on the returns. Petitioners' argument that
there was substantial authority, merely because the issues were
litigated in this case, is without merit. We, therefore, sustain
the additions to tax under section 6661 for each of the years
here in issue if, upon recomputation of petitioner's tax
liability for the years here in issue, a substantial
understatement as stated in section 6661(b)(1)(A) results.
Decision will be
entered under Rule 155.
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