31
shown on the return less the amount actually shown on the return.
Sec. 6661(b)(2)(A).
Petitioners contend that they are not liable for the
addition for substantial understatement because they acted in
good faith in relying on Perkins in filing their 1990 and 1991
returns. We disagree for the reasons stated at par. B-1, above.
We sustain respondent's determination on this issue.
3. Accuracy-Related Penalty
Taxpayers are liable for a penalty equal to 20 percent
of the part of the underpayment due to negligence or disregard of
rules or regulations or to a substantial understatement of income
tax. Sec. 6662(a), (b)(1) and (2). Negligence includes a
failure to make a reasonable attempt to comply with the internal
revenue laws or to exercise ordinary and reasonable care in the
preparation of a tax return. Sec. 6662(c). An understatement is
substantial if it exceeds the greater of 10 percent of the tax
required to be shown on the return or $5,000. Sec.
6662(d)(1)(A). Petitioners bear the burden of proving that they
are not liable for the accuracy-related penalty imposed by
section 6662(a). Rule 142(a).
Petitioners argue that they are not liable for the accuracy-
related penalty because they relied on their accountant to
prepare accurate returns for them for 1990 and 1991. Petitioners
point out that Perkins testified that petitioner-husband prepared
summaries of his business activities for 1990 and 1991, and that
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