J. Brent Haymond and Janis S. Haymond - Page 13

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               amounts) for such taxable year to the extent such                      
               liability is attributable to such substantial                          
               understatement.                                                        
               The taxpayer has the burden of proving that he or she meets            
          each of these requirements; a failure to prove any one of these             
          requirements will prevent the taxpayer from qualifying for                  
          relief.  Stevens v. Commissioner, 872 F.2d 1499, 1504 (11th Cir.            
          1989), affg. T.C. Memo. 1988-63; Bokum v. Commissioner, 94 T.C.             
          126, 138 (1990), affd. 992 F.2d 1132 (11th Cir. 1993).                      
               Petitioners filed a joint tax return for the year at issue             
          and substantially understated their tax.  Petitioners argue that            
          if the Court holds for respondent on the issue of the inclusion             
          of the commission in basis, then such inclusion was grossly                 
          erroneous, and Mrs. Haymond is an innocent spouse.                          
               For items of basis, "grossly erroneous items" means any                
          claim in an amount for which there is no basis in fact or law.              
          Sec. 6013(e)(2)(B).  There is no basis in law or fact if the                
          claim is fraudulent, phony, frivolous, or groundless.  Feldman v.           
          Commissioner, 20 F.3d 1128, 1135 (11th Cir. 1994), affg. T.C.               
          Memo. 1993-17; Russo v. Commissioner, 98 T.C. 28, 32 (1992).  The           
          disallowance of an item is not, in and of itself, proof of the              
          lack of basis in fact or in law.  Feldman v. Commissioner, supra            
          at 1136; Russo v. Commissioner, supra.                                      
               The claim in the instant case was not fraudulent, phony,               
          frivolous, or groundless.  The existence of the proposed                    





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