Alfred E. Gallade - Page 21

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          year, the amount of the understatement exceeds the greater of 10            
          percent of the tax required to be shown on the return for the               
          taxable year or $5,000.  Sec. 6661(b)(1)(A).  Section 6661(a)               
          provides for an addition to tax equal to 25 percent of the amount           
          of any underpayment attributable to such understatement.                    
          Pallottini v. Commissioner, 90 T.C. 498 (1988).                             
               The understatement is reduced by that portion for which                
          there is "substantial authority" or that has been "adequately               
          disclosed".  Sec. 6661(b)(2)(B).  Petitioner did not disclose the           
          transaction at issue on his 1985 or 1986 Federal income tax                 
          returns, so there could not have been adequate disclosure.                  
          Moreover, to show that he had substantial authority, petitioner             
          must demonstrate that the substantial weight of authority                   
          supports the positions taken on his income tax return.  Sec.                
          1.6661-3(b)(1), Income Tax Regs.; see also Nestle Holdings, Inc.            
          v. Commissioner, T.C. Memo. 1995-441.  Petitioner has not shown             
          this Court any authority for his tax positions.  Furthermore,               
          opinions of tax professionals may not constitute such authority.            
          See, e.g., sec. 1.6661-3(b)(2), Income Tax Regs.  In this case,             
          there was no “substantial authority”.                                       
               Section 6661(c) provides that the Secretary may waive this             
          penalty “on a showing by the taxpayer that there was reasonable             
          cause for the understatement * * * and that the taxpayer acted in           
          good faith.”  The denial of a waiver under section 6661(c) is               
          reviewable by this Court, and the appropriate standard of review            

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