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section 6662(b)(2) relating to the penalty for any portion of the
underpayment attributable to any substantial understatement of
income tax.
The maximum accuracy-related penalty imposed on an
underpayment of tax may not exceed 20 percent of such
underpayment, notwithstanding that such portion is attributable
to more than one of the types of misconduct described in section
6662(a). Sec. 1.6662-2(c), Income Tax Regs. Therefore, although
the underpayment of tax required to be shown on petitioner's 1990
income tax return was attributable to both negligence and a
substantial understatement of income tax, the maximum accuracy-
related penalty petitioner is liable for is 20 percent.
Petitioner did not make a showing that there was a
reasonable cause for the understatements of income under section
6664(c). Accordingly, respondent is sustained on the imposition
of the accuracy-related penalty under section 6662(a).
Decision will be entered
for respondent.
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Last modified: May 25, 2011