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(i)(II), the taxpayer must reasonably believe at the time the
return is filed that the tax treatment claimed is more likely
than not the proper tax treatment. Section 1.6661-5(d), Income
Tax Regs., specifies where a taxpayer will be considered
reasonably to believe that the tax treatment of an item is more
likely than not the proper tax treatment: First, if the taxpayer
himself analyzes the pertinent facts and authorities and, on the
basis thereof, reasonably concludes that there is a greater than
50-percent likelihood that the tax treatment of the item will be
upheld in litigation with the Internal Revenue Service. Second,
if the taxpayer in good faith relies on the opinion of a
professional tax adviser who makes a similar analysis and
unambiguously states a similar conclusion.
Petitioners bear the burden of proof. Rule 142(a).
The record is clear that there are substantial
understatements in tax for both 1982 and 1983 unless the amounts
that would otherwise be understatements for such years are
reduced pursuant to section 6661(b)(2)(B). Petitioners argue
that there is substantial authority supporting their position
that petitioner was at risk within the meaning of section 465(a)
with regard to both installment notes. Indeed, in Waters v.
Commissioner, T.C. Memo. 1991-462, which involved an equipment
leasing transaction, we found that the taxpayer had substantial
authority for claiming the deductions relating to his
participation in the transaction. Based on that finding, we
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