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understatement. Pallottini v. Commissioner, 90 T.C. 498, 503
(1988). An understatement is substantial if it exceeds the
greater of $5,000 or 10 percent of the tax required to be shown
on the return. Sec. 6661(b)(1)(A). This amount may be reduced,
however, if the taxpayer shows that there was substantial
authority for his treatment of an item, or that the relevant
facts affecting the tax treatment of the item are adequately
disclosed on the return or in a separate statement attached to
the return. Sec. 6661(b)(2)(B). Substantial authority exists
only if the weight of the authorities supporting the treatment of
an item is substantial in relation to the weight of authorities
supporting contrary positions. Sec. 1.6661-3(b)(1), Income Tax
Regs. Petitioner bears the burden of demonstrating that he had
substantial authority for his position. Rule 142(a); King's
Court Mobile Home Park, Inc. v. Commissioner, 98 T.C. 511, 517
(1992).
We have already rejected petitioner's explanation for his
failure to report the sale of the automobiles on his 1988 return,
and petitioner has failed to offer any other reason for relieving
him of the section 6661 addition to tax. Since all of the
requirements for imposition of the section 6661 addition to tax
have been satisfied, we sustain respondent's determination.
Decision will be entered
for respondent.
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