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length. We cannot accept petitioner's uncorroborated testimony
to this effect. Petitioner's testimony was not forthright, and
we found his testimony not credible. In contrast, Dr. Chan
credibly testified that it was petitioner who requested that he
pay for the lessons, set the amount, and directed to whom the
checks should be made payable. We accept his testimony and find
that the weight of the evidence supports this conclusion.
Respondent determined that petitioners are liable for an
accuracy-related penalty under section 6662(a) for a substantial
understatement in tax for the 1990 tax year. A substantial
understatement of tax exists when the amount of the understate-
ment for the taxable year exceeds the greater of 10 percent of
the tax required to be shown on the return or $5,000. Sec.
6662(d)(1). An underpayment equals the excess of the tax imposed
over the amount shown as tax on the taxpayer's return, plus the
amounts not shown but previously assessed or collected, less
rebates. Sec. 6664(a). Petitioners suggest no reasonable cause
for this understatement, nor do we find that one exists. Because
we hold that petitioners failed to report the amounts paid by
Dr. Chan and Shanghai Clinic to Yao Min Ting, Ting Yao Min, and
Tang Chiang Ting on account of services petitioner rendered and
petitioners reported tax due on their 1990 Federal tax return of
only $8, petitioners are liable for the penalty under section
6662.
Decision will be entered
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