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deficiency for 1988 was issued, the 6-year period of limitations
had not yet expired, and the omitted $40,950 could have properly
been included in respondent's deficiency notice. Accordingly,
respondent is not time-barred from asserting an increased
deficiency in her amended answer with respect to the omitted
$40,950 of wage income.
Issue 4. Accuracy-Related Penalty
Respondent determined an accuracy-related penalty under
section 6662(a) for 1989, 1990, and 1991. Section 6662 imposes a
penalty equal to 20 percent of the portion of an underpayment that,
among other things, is a substantial understatement of income tax.
An understatement of income 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). The deficiencies here determined are
substantial understatements.
The accuracy-related penalty does not apply with respect to
any portion of the underpayment if it is shown that there was
reasonable cause for such portion and that the taxpayer acted in
good faith with respect to such portion. Sec. 6664(c)(1).
Petitioners claim that they relied on their accountant to correctly
prepare their returns. Reliance by a taxpayer on the advice of a
qualified adviser will constitute reasonable cause and good faith
3(...continued)
computing the gross income reported on the return. See Burbage
v. Commissioner, 82 T.C. 546, 558 (1984), affd. 774 F.2d 644 (4th
Cir. 1985).
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