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$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
142(a).
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.
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