- -17 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Last modified: May 25, 2011