- 15 - On the instant record, we find that petitioner has failed to show error in respondent's determination in the notice, as reduced by her concessions on brief, that for 1986 he is liable for the additions to tax under section 6653(a)(1)(A) and (B). Addition to Tax--Section 6661(a) Respondent determined in the notice that petitioner is liable for 1986 for the addition to tax under section 6661(a) only with respect to the $122,461 understatement of income for that year determined in the notice pursuant to the cash expendi- tures method. Respondent concedes on brief that petitioner's unreported income for 1986 calculated pursuant to that method is $117,208, and not $122,461 as determined in the notice. In light of the foregoing concession of respondent, and as stated infra, the understatement for 1986 with respect to which the addition to tax under section 6661(a) may be imposed shall be correspondingly reduced. If there is a substantial understatement of income tax for a taxable year, section 6661(a) imposes an addition to tax equal to 25 percent of the underpayment attributable to that understate- ment. An understatement exists where the amount of tax shown in the taxpayer's return is less than the amount required to be shown in that return. Sec. 6661(b)(2)(A). In the case of individuals, an understatement is substantial if it exceeds the greater of $5,000 or 10 percent of the tax required to be shown.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011