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proof regarding his entitlement to such a loss carryforward nor
that such a loss would have reduced his income such that he would
not be required to pay estimated taxes. Once again he makes
conclusory and unsupported arguments that fail to support his
burden of proof. Respondent is sustained on this issue.
Substantial Understatement Penalty--Michoff, Jr.
Respondent determined an addition to tax of $2,095 under
section 6661 for the tax year 1988 for Michoff, Jr. Section
6661(a) imposes an addition to tax of 25 percent of the amount of
any underpayment attributable to a substantial understatement of
tax. An understatement is the difference between the amount
required to be shown on the return and the amount actually shown
on the return and is substantial if it exceeds the greater of (1)
10 percent of the tax required to be shown on the return for a
taxable year, or (2) $5,000. Sec. 6661(b)(1) and (2)(A). The
understatement is reduced to the extent that the taxpayer has (1)
adequately disclosed his or her position or (2) has substantial
authority for the tax treatment of an item. Sec. 6661; sec.
1.6661-6(a), Income Tax Regs. Petitioner has the burden of
proving he is not liable for the addition to tax. Rule 142(a).
The only argument of Michoff, Jr., is that he is not liable
for understating his taxes in 1988 and, thus, should not be
charged with the substantial understatement addition to tax.
Based on our findings in this case, there was a substantial
understatement, and, thus, respondent's determination is
sustained.
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