Anna Ruth French - Page 11

                                       - 11 -                                         
          $150,000 was in addition to all other support petitioner received           
          during 1990.                                                                
               Accordingly, we find that it is not inequitable to hold                
          petitioner liable for the deficiency attributable to Mr. French’s           
          substantial understatement.  We therefore hold that petitioner              
          has not met all the conjunctive requirements of section 6013(e),            
          and she is not entitled to relief as an innocent spouse.  As a              
          result of this holding, it is unnecessary for us to consider                
          whether petitioner knew or had reason to know of Mr. French’s               
          substantial understatement.                                                 
          Issue 2.  Addition to Tax, Section 6661                                     
               Respondent determined that petitioner is liable for the                
          addition to tax pursuant to section 6661 for taxable year 1986              
          due to a substantial understatement of income tax.  Respondent's            
          determination carries the presumption of correctness.  Rule                 
               The addition to tax is 25 percent of any underpayment                  
          attributable to a substantial understatement.  Sec. 6661(a);                
          Pallottini v. Commissioner, 90 T.C. 498 (1988).  A substantial              
          understatement is one which exceeds the greater of 10 percent of            
          the tax required to be shown on the return or $5,000.  Sec.                 
          6661(b)(1).  Petitioner has not shown that the understatement for           
          taxable year 1986 is subject to reduction pursuant to section               
          6661(b)(2)(B)(i) or (ii).  Accordingly, respondent's                        
          determination as to this issue is sustained.                                

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011