- 21 - status, (B) his stated ability to open his own office and deal as any other broker does, * * * Groetzinger did apply to Mr. Kelly's option trading activities as an ROP". (Emphasis added.) However, Mr. Kelly has not shown by his own testimony or otherwise that his status as a registered options principal in fact entitled him to open his own office and deal in options. Thus he has not satisfied his burden of showing that he provided his accountant with complete and accurate information on this material point. We therefore reject Mr. Kelly's claim of reliance on his accountant. The additions to tax under section 6653(a) are accordingly sustained. Respondent further determined that petitioners are liable for the additions to tax under section 6661. Section 6661 imposes an addition to tax equal to 25 percent of the amount of any underpayment attributable to a substantial understatement of income tax. An understatement is substantial if it exceeds the greater of 10 percent of the tax required to be shown on the return or $5,000. Sec. 6661(a) and (b)(1). The amount of the understatement is reduced by that portion which is attributable to: (1) The tax treatment of any item for which there was substantial authority, or (2) any item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to the return. Sec. 6661(b)(2)(B).Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: May 25, 2011