R. Edwin Brown and Winsome S. Brown - Page 16

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          and the prior inconsistent positions of respondent make any                 
          penalty inappropriate.                                                      
               Section 6662(a) imposes an accuracy-related penalty of 20              
          percent on any portion of an underpayment of tax that is                    
          attributable to items set forth in section 6662(b).  Section                
          6662(b)(2) specifies as one of those items “Any substantial                 
          understatement of income tax.”  An understatement is substantial            
          if it exceeds the greater of 10 percent of the amount of tax                
          required to be shown on the return or $5,000.  Sec. 6662(d)(1)(A)           
          and (B).  An understatement means the excess of the amount of the           
          tax required to be shown on a return over the amount of tax                 
          imposed which is shown on the return, reduced by any rebate                 
          (within the meaning of section 6211(b)(2)).  Sec. 6662(d)(2)(A).            
               An understatement is reduced to the extent it is (1) based             
          on substantial authority or (2) adequately disclosed in the                 
          return or in a statement attached to the return.  Sec.                      
          6662(d)(2)(B).  To determine whether the treatment of any portion           
          of an understatement is supported by substantial authority, the             
          weight of authorities in support of the taxpayer’s position must            
          be substantial in relation to the weight of authorities                     
          supporting contrary positions.  Antonides v. Commissioner, 91               
          T.C. 686, 700-704 (1988), affd. 893 F.2d 656 (4th Cir. 1990);               
          sec. 1.6662-4(d)(3), Income Tax Regs.                                       
               Furthermore, the accuracy-related penalty under section                
          6662(b)(2) does not apply with respect to any portion of an                 

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