Mark D. and Sheldon C. Morgan - Page 11

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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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