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(2) Any substantial understatement of
income tax.
Respondent determined that the entire underpayment of tax
in 1990 is attributable to negligence or disregard of rules
and regulations. Respondent further determined that the
entire underpayments of tax in 1991 and 1992 are
attributable to substantial understatements of income tax,
or, alternatively, are due to negligence or disregard of
rules and regulations.
For purposes of section 6662, the term "negligence"
includes any failure to make a reasonable attempt to comply
with the provisions of the tax code, and the term
"disregard" includes any careless, reckless, or intentional
disregard. Sec. 6662(c). For purposes of section 6662,
the phrase "substantial understatement of income tax" is
defined by section 6662(d)(1) as follows:
(A) In general.--For purposes of this sec-
tion, there is a substantial understatement of
income tax for any taxable year if the amount of
the understatement for the taxable year exceeds
the greater of--
(i) 10 percent of the tax required to
be shown on the return for the taxable
year, or
(ii) $5,000.
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