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(B) amounts not so shown
previously assessed (or collected
without assessment), over
(2) the amount of rebates made.
See also sec. 1.6664-2(a), Income Tax Regs. Petitioner
argues that there is no underpayment because "(exclusive
of the accounting change issue) there were actually more
adjustments in Taxpayer's favor than adjustments which
would result in additional tax." In effect, petitioner is
arguing that for purposes of determining the amount of the
underpayment, the "tax imposed", as that phrase is used in
section 6664(a), does not include the tax attributable to
the "accounting change issue". Petitioner cites no
authority in support of that argument, and we reject it as
contrary to the statute and the regulations. In this case,
respondent has proven that there is an underpayment of tax
and that a portion of the underpayment is attributable to
fraud.
Penalty for Substantial Understatement of Income Tax
Respondent determined that petitioner is liable for
the accuracy-related penalty under section 6662(a) in the
amount of $303,025.86 with respect to petitioner's 1990
taxable year. Respondent determined that the penalty
applied to the entire underpayment, except for the portion
attributable to the omission of $127,889 with respect to
which respondent determined the fraud penalty.
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