Clarence A. Hunt, Jr. - Page 9

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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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