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treatment of the item was based on substantial authority, or (2)
the taxpayer adequately disclosed on the tax return or in a
statement attached to the tax return the relevant facts affecting
the item's tax treatment. Sec. 6661(b)(2)(B).
Respondent has authority to waive this addition to tax, if
the taxpayer shows there was reasonable cause for the
understatement and the taxpayer acted in good faith. Sec.
6661(c).
Petitioner has the burden of proving error in respondent's
determination that such an addition to tax should be imposed
against him. Rule 142(a); Welch v. Helvering, 290 U.S. at 115.
Petitioner has not shown (1) that he had substantial authority
for the position taken on his tax return, (2) that he adequately
disclosed his position in a statement attached to the tax return
or on the tax return, (3) that he had reasonable cause for the
understatement, or (4) that he acted in good faith. Thus,
petitioner has failed to carry his burden of proof.
We hold for respondent on this issue.
To reflect the foregoing,
Decision will be entered
for respondent.
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