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that such technology was not technically viable at the time and
that minimal oil was produced therefrom.
In evaluating the imposition of the additions to tax in the
instant cases, and in light of the above facts (encouraging
investments in and the development of tertiary oil recovery methods
such as EOR technology), we are somewhat understanding of the
individual investments that were made in the Boulder, Tech-1979,
and Winfield partnerships. In the context of the hysteria relating
to the energy crisis, the oil price increases of the late 1970's,
the industry and governmental interest in EOR technology, the heavy
and sophisticated promotion of these investments, and the evidence
in these cases (and in spite of our findings and conclusions
sustaining respondent's substantive tax adjustments), we conclude
that petitioners are not liable for the additions to tax under
section 6653(a)(1) and (2).
For 1981 and 1982, respondent in these cases, on brief, has
conceded the section 6659 additions to tax.
For 1982, respondent asserts that petitioners, John and
Cornelia Vanderschraaf, are liable for an addition to tax for
substantial understatement of tax under section 6661, equal to 25
percent of the respective underpayment of tax attributable to such
understatement of tax. In order for an understatement of tax to be
considered substantial, the amount of the understatement must
exceed the greater of 10 percent of the tax required to be shown on
the Federal income tax return or $5,000. Sec. 6661(b)(1)(A).
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