- 17 -
Series 162 was over 1,000 percent and accordingly applied the 30-
percent rate.
As stated above, petitioners bear the burden of proving that
respondent's determination on this issue in the notice of
deficiency is erroneous. Rule 142(a); Bixby v. Commissioner, 58
T.C. 757, 791 (1972). Petitioners failed to present any evidence
to show that respondent's determination under section 6659(a) was
erroneous. Accordingly, respondent is sustained on this issue.
Section 6661(a) imposes an addition to tax equal to 25
percent of the amount attributable to a substantial
understatement of income tax. An understatement is substantial
if it exceeds the greater of 10 percent of the tax required to be
shown on the return or $5,000. Sec. 6661(b)(1)(A).8
Petitioners failed to present any evidence to prove that
they should not be held liable for the additions to tax under
section 6661(a). Rule 142(a); Bixby v. Commissioner, supra.
Accordingly, respondent is sustained on this issue.
With respect to the increased rate of interest determined by
respondent, section 6621(c) provides for an increased rate of
interest with respect to any underpayment in excess of $1,000
that is "attributable to one or more tax motivated transactions".
8
An understatement will be reduced to the extent that it is:
(1) Based on substantial authority, or (2) adequately disclosed
in the return or in a statement attached to the return. Sec.
6661(b)(2)(B). Petitioners have failed to prove that either of
these situations existed in this case.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011