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that they advised petitioner or any of its employees to
book the omitted receipts to account 312 rather than to
an income account. This was done on the instructions of
Mr. Cordes. Under these circumstances, petitioner's
claim of reliance on its accountants is without merit.
Moreover, even if petitioner's certified public accountants
had given such advice with knowledge of all of the relevant
facts, the advice would have been so clearly wrong that we
could not find that petitioner relied upon the advice in
good faith. See Laverne v. Commissioner, 94 T.C. 637,
652-653 (1990), affd. 956 F.2d 274 (9th Cir. 1992), affd.
without published opinion sub nom. Cowles v. Commissioner,
949 F.2d 401 (10th Cir. 1991); Horn v. Commissioner, 90
T.C. 908, 942 (1988). Accordingly, we sustain respondent's
determination of the fraud penalty under section 6663(a) as
to the underpayment attributable to $127,889 of omitted
income.
Finally, we reject petitioner's argument that the
fraud penalty under section 6663(a) should not be
imposed because there is no "underpayment". The term
"underpayment" is defined by section 6664(a), as follows:
the term "underpayment" means the amount by which
any tax imposed by this title exceeds the excess
of--
(1) the sum of--
(A) the amount shown as the tax
by the taxpayer on his return, plus
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