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base for the negligence additions to tax. Sec. 6653(c), now to
be found in sec. 6664(a).
Consequently, we hold, for respondent, that for each of the
years in issue19 the entire underpayment of tax is due to
petitioners’ negligence.
C. Section 6661(a)
Section 6661(a)20 imposes an addition to tax of 25 percent
of the amount of any underpayment attributable to a substantial
understatement of tax. Cochrane v. Commissioner, 107 T.C. 18, 29
(1996); Pallottini v. Commissioner, 90 T.C. 498 (1988). An
understatement is substantial if it exceeds the greater of 10
percent of the correct tax or $5,000. Sec. 6661(b)(1)(A). (Our
19 See Emmons v. Commissioner, 92 T.C. 342, 347-351
(1989), affd. 898 F.2d 50 (5th Cir. 1990), as to the effect that
the late filing of petitioners’ 1987 tax return would have on the
negligence addition for 1987. We have not engaged in an Emmons-
type analysis in the instant case because the parties did not
present the point, and such an analysis would not affect the
conclusions we reached on different grounds.
20 SEC. 6661. SUBSTANTIAL UNDERSTATEMENT OF LIABILITY.
(a) Addition to Tax.--If there is a substantial
understatement of income tax for any taxable year, there
shall be added to the tax an amount equal to 25 percent of
the amount of any underpayment attributable to such
understatement.
Sec. 6661 was repealed by sec. 7721(c)(2) of OBRA 89, 103
Stat. 2399. The substance of former sec. 6661 now appears as
secs. 6662(b)(2), 6662(d), and 6664(c)(1).
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