- 15 -
of expertise necessary for them to have understood the relevance
of that lease to their returns would be tantamount to holding
those taxpayers to a higher standard than that of a reasonable
and prudent person.
Based on the entire record before us, we find that peti-
tioners have failed to satisfy their burden of proving that they
did not act negligently when they claimed in their 1983 return a
loss of $13,919 and an investment tax credit of $20,899 with
respect to Ridge Energy. Accordingly, we sustain respondent's
determination for that year imposing the additions to tax under
section 6653(a)(1) and (2).
Section 6661(a)
Section 6661(a) imposes an addition to tax equal to 10
percent of the amount of any underpayment attributable to a
substantial understatement of income tax. An understatement of
income tax exists where the amount of tax shown in the taxpayer's
return is less than the amount required to be shown in his or her
return. Sec. 6661(b)(2)(A). In the case of an individual, an
understatement is substantial where it exceeds the greater of
$5,000 or 10 percent of the tax required to be shown in the
taxpayer's return. Sec. 6661(b)(1)(A). In a case involving a
tax shelter like the Saxon Energy leasing program in question,7
7 Petitioner does not dispute that the Saxon Energy leasing
program in question is a tax shelter. See Schillinger v. Commis-
sioner, T.C. Memo 1990-640, affd. without published opinion 1
(continued...)
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