- 32 -
not include evidence that petitioner provided complete and
accurate information to Levine, it is not necessary for us to
explore in the instant case whether he could have avoided the
negligence addition to tax by providing this information to
Levine. See discussions in Metra Chem Corp. v. Commissioner, 88
T.C. at 662; Pritchett v. Commissioner, 63 T.C. at 174.
We hold for respondent on this issue.
B. Section 6661
Section 6661(a)10 imposes an addition to tax of 25 percent
of the amount of any underpayment attributable to a substantial
understatement of tax. Pallottini v. Commissioner, 90 T.C. 498
(1988). An understatement is substantial if it exceeds the
greater of 10 percent of the correct tax or $5,000. Sec.
6661(b)(1)(A). (Our holdings make it clear that petitioner has a
substantial understatement for 1987.)
If an item is not attributable to a tax shelter, then the
understatement shall be reduced on account of the item, and the
addition to tax accordingly reduced, if (1) the taxpayer's
10
Sec. 6661 provides, in relevant part, as follows:
SEC. 6661. SUBSTANTIAL UNDERSTATEMENT OF LIABILITY.
(a) Addition to Tax.--If there is a substantial
understatement of income tax for any taxable year, there
shall be added to the tax an amount equal to 25 percent of
the amount of any underpayment attributable to such
understatement.
Sec. 6661 was repealed by sec. 7721(c)(2) of OBRA 89, Pub.
L. 101-239, 103 Stat. 2106, 2399. The substance of former sec.
6661 now appears as secs. 6662(b)(2), 6662(d), and 6664(c)(1).
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