55
the return or in a statement attached to the return. Sec.
6661(b)(2)(B). In these cases, Alondra's understatement for
Alondra's fiscal 1987 was not adequately disclosed. We cannot
say that there was substantial authority for petitioners' tax
treatment of the disputed items, even under the liberal standards
just enunciated by the Court of Appeals for the Eleventh Circuit
in Osteen v. Commissioner, 62 F.3d 356, 359-360 (11th Cir. 1995),
affg. in part and revg. in part T.C. Memo. 1993-519. Osteen can
be distinguished from Alondra's case, primarily because the issue
here is purely factual. Nor do we have here the all-or-nothing
situation that troubled the Court of Appeals for the Eleventh
Circuit in Osteen.
Section 6661(c) provides that the Secretary may waive all or
any part of the addition to tax for substantial understatement on
a showing by the taxpayer that there was reasonable cause for the
understatement (or part thereof) and that the taxpayer acted in
good faith. While the authority to waive the section 6661
addition to tax rests with the Commissioner, not with this Court,
we review the denial of a waiver by the Commissioner under the
abuse of discretion standard. Mailman v. Commissioner, 91 T.C.
1079, 1084 (1988).27
27Under sec. 6664(c) of current law, OBRA 89 sec. 7721(a),
103 Stat. 2398, effective for returns the due date for which is
after Dec. 31, 1989, the Commissioner no longer has this
discretion, and no penalty can be imposed for underpayments if it
is shown that there was a reasonable cause for them and that the
taxpayer acted in good faith, but this is new law, not in effect
for the cases before us.
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