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amount of the understatement exceeds the greater of 10 percent of
the tax required to be shown on the return for the taxable year,
or $5,000. Sec. 6662(d)(1)(A).
Under section 6662(d)(2), the term "understatement" means
the excess of the amount of tax required to be shown on the
return over the amount of tax shown on the return, reduced by any
rebate (within the meaning of section 6211(b)(2)). The
computation of the correct amount of the section 6662(a) penalty
will be made under Rule 155.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011