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Respondent determined that petitioner is liable for the
additions to tax for failure to file timely returns for 1988,
1989, and 1990. Section 6651(a)(1) imposes an addition to tax in
case of failure to file a timely tax return, unless the taxpayer
can show that such failure is due to reasonable cause and not due
to willful neglect. Petitioner neither argued nor offered any
evidence to show that the additions to tax pursuant to section
6651(a)(1) should not be imposed. Therefore, we sustain
respondent's determination under section 6651(a)(1).
Respondent also determined that petitioner is liable for the
addition to tax for substantial understatement of income tax, as
prescribed by section 6661 with respect to his 1988 return. As
in effect during 1988, section 6661(a) imposed an addition to
tax equal to 25 percent of the amount of any underpayment
attributable to a substantial understatement of income tax.
Finally, respondent determined that petitioner is liable for the
accuracy-related penalties prescribed by section 6662 with
respect to his 1989, 1990, and 1991 returns. Section 6662(a)
imposes a penalty equal to 20 percent of the portion of any
underpayment attributable to a substantial understatement of
income tax.
Both sections 6661 and 6662 define a "substantial
understatement" as an understatement of tax liability equal to
the greater of 10 percent of the tax required to be shown for the
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