26
Petitioners argue that they established that the general
business credit arose from Bob Wade Ford's purchase of assets
qualifying for the investment tax credit. We disagree;
petitioners have not identified the property for which the credit
was claimed or established that the property was qualified
property. Sec. 38(a). We sustain respondent on this issue.
F. Substantial Understatement of Income Tax
The next issue for decision is whether petitioners are
liable for the addition to tax under section 6661(a) for 1988 and
the accuracy-related penalty under section 6662(d) for 1989 for
substantial understatement of income tax. Section 6661(a)
imposes an addition to tax equal to 25 percent of the amount of
any underpayment attributable to a substantial understatement of
income tax. The accuracy-related penalty equals 20 percent of
any part of an underpayment attributable to a substantial
understatement of income tax. Sec. 6662(a) and (b)(2).
An understatement is the amount by which the correct tax
exceeds the tax reported on the return. Sec. 6661(b)(2)(A). 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.
Secs. 6661(b)(1)(A) and 6662(d)(1)(A). Petitioners bear the
burden of proving that they are not liable for the addition to
tax under section 6661(a) and the accuracy-related penalty
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