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The amount of the understatement may be reduced under
section 6661(b)(2)(B) for amounts adequately disclosed or
supported by substantial authority. In addition, section 6661(c)
authorizes the Secretary to--
waive all or any part of the addition to tax * * * on a
showing by the taxpayer that there was reasonable cause
for the understatement * * * and that the taxpayer
acted in good faith.
Petitioner argues that there is substantial authority for
the positions taken on his 1982, 1983, and 1984 returns with
respect to the payments he received from the partnerships and
Newtowne, and the bad debt deduction claimed on his 1984 return.
Petitioner further argues that he acted in good faith and that
there is reasonable cause for the understatements. Finally,
petitioner argues that he accurately described the relevant facts
relating to the positions taken on his returns.
Petitioner has not demonstrated what authorities he
purportedly relied upon for the positions taken on his returns.
Nor has he shown that any authority he relied upon was
substantial. Given that we have found that petitioner
fraudulently, and with the intent to evade tax, substantially
understated his income tax for the years in issue, we cannot
conclude that petitioner acted in good faith or with reasonable
cause with respect to the positions taken on his 1982, 1983, and
1984 returns. Furthermore, we have found that petitioner did not
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