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underpayment and acted in good faith. Irene contends that the
underpayment in taxes for 1988, 1989, and 1990 was due to
reasonable cause, arguing that she relied on the decision of the
circuit court and on the advice of a competent tax adviser.
Because the circuit court did not rule on the issue of whether
the payments were taxable to Irene or deductible by Edward, we
find that reliance on the decision was not reasonable. Irene did
not present sufficient evidence to support her claim that she
filed her returns based upon the advice of a competent tax
professional. We, therefore, hold that Irene is liable for the
addition to tax under section 6661 for 1988 and the penalties
under section 6662 for 1989 and 1990.
5. Additions to Tax -- Edward
Respondent determined that Edward is liable for an addition
to tax under section 6661(a) for the taxable year 1988 and
penalties under section 6662(b)(2) for the taxable years 1989 and
1990.
Section 6661(b)(2) provides for a penalty if there is a
substantial understatement of tax. Because we hold that the
payments in 1988 are deductible by Edward, there is no substan-
tial understatement of tax in 1988. Accordingly, we hold that
Edward is not liable for the understatement addition for 1988.
Section 6662(a) provides for an addition to tax if there is
a substantial understatement of tax. Because we hold that the
payments in 1989 and 1990 made pursuant to the circuit court
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