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Pursuant to our direction that a decision in this case would
be entered pursuant to Rule 155, respondent subsequently agreed
that petitioner (1) was not liable for an addition to tax for
failure to file under section 6651(a) for 1986, because her
withholding tax credits exceeded the tax required to be shown on
her return, (2) was not liable for an addition to tax for
substantial understatement under section 6661 for 1987, because
there was no substantial understatement of her tax for that year,
and (3) was liable, in recomputed amounts, for additions to tax
for negligence under section 6653(a), for 1986 and 1987.
Petitioner failed to timely file her 1986 return. As a
result, in our opinion in Sharer v. Commissioner, supra, we
originally determined that she would be liable for an addition to
tax under section 6651(a) for 1986. We further originally
determined that petitioner would be liable for additions to tax
for (1) negligence under section 6653(a), for 1986 and 1987, and
(2) substantial understatement under section 6661, for 1986 and
1987, if the Rule 155 computation reflected that she had
substantially understated her tax for those years.
Respondent's position on these issues was substantially
justified. As discussed above, respondent's position on a number
of other issues which we decided in petitioner's favor was
reasonable and substantially justified. If these other issues
had been decided in respondent's favor, then the withholding
credits would not have exceeded the tax required to be shown on
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