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establish that they adequately disclosed the balance of the lump-
sum credit.
The accuracy-related penalty pursuant to section 6662(b)(2)
does not apply to any portion of an underpayment if it is shown
that there was reasonable cause for that portion of the
underpayment and that the taxpayers acted in good faith with
respect to such portion. Sec. 6664(c)(1). The determination of
whether petitioners acted with reasonable cause and in good faith
depends upon the pertinent facts and circumstances. Sec. 1.6664-
4(b)(1), Income Tax Regs. The most important factor is the
extent of the taxpayers' effort to assess their proper tax
liability for the taxable year. Id. After carefully examining
the record, we find no basis on which we can conclude that
petitioners acted with reasonable cause and in good faith with
respect to any portion of the understatement determined by
respondent. By their own admission, petitioners acknowledge that
Mr. Logsdon is a "professional accountant and is well versed in
tax reporting procedures," yet they do not present any evidence
of their effort to assess their proper tax liability.
Petitioners have failed to prove that they had substantial
authority, that they adequately disclosed the relevant facts
concerning the lump-sum credit, or that they acted with
reasonable cause and in good faith with respect to any portion of
the understatement. Because petitioners' understatement for the
1991 taxable year is substantial, we sustain respondent's
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