Sherman J. Miller and Alice K. Miller - Page 17

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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.                                       
                  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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