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pursuant to section 6661 with respect to their 1983, 1984, and
1985 income tax returns. As in effect during 1983, 1984, and
1985, section 6661(a) imposed an addition to tax equal to 10
percent of the amount of any underpayment attributable to a
substantial understatement of income tax. An understatement is
defined in section 6661(b)(2)(A) as the excess of the amount of
tax required to be shown on the return over the amount of tax
imposed which is shown on the return. There is a substantial
understatement under section 6661(b)(1)(A) if the amount of the
understatement for the taxable year exceeds the greater of 10
percent of the tax required to be shown on the return or $5,000.
All of petitioners' tax returns for the years in issue have
understatements of tax in excess of the threshold.
Petitioners bear the burden of proving that the additions to
tax do not apply. Rule 142(a); Luman v. Commissioner, 79 T.C.
846, 861-862 (1982). Petitioners failed to introduce convincing
evidence that they were not negligent or that respondent's
determination is erroneous. Accordingly, we sustain respondent's
determination that petitioners are liable for the additions to
tax pursuant to section 6653(a)(1)(A) and (B) in 1986 and section
6661 with respect to their returns in 1983, 1984, and 1985.
Decision will be entered
under Rule 155.
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