- 38 -
negligence is erroneous. See Rule 142(a); Hitchins v.
Commissioner, supra.
Petitioners have not introduced any evidence or made
any argument that they acted with reasonable care in
reporting their income for 1988. Consequently, we find
that petitioners have failed to satisfy their burden of
proving that respondent's determination of negligence is
erroneous.
In addition to negligence, respondent determined that
petitioners are liable for the addition to tax for sub-
stantial understatement of income tax, as prescribed by
section 6661 with respect to their 1988 return. As in
effect during 1988, section 6661 imposed an addition to
tax equal to 25 percent of any underpayment of income tax
attributable to a substantial understatement of liability.
Sec. 6661(a). Respondent also determined that petitioners
are liable for the accuracy-related penalty prescribed by
section 6662 with respect to their 1989 return. Section
6662 imposes a penalty equal to 20 percent of any under-
payment of income tax attributable to a substantial
understatement of liability. Sec. 6662(a).
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
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