Jose M. Vidaurre and Ana Maria Vidaurre - Page 7

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          following the close of the calendar year.  Sec. 6072(a).                    
          Petitioners did not file their 1990 tax return until November 21,           
          1991.  They offered no explanation for their lateness.  We                  
          therefore hold that petitioners' failure to timely file was not             
          due to reasonable cause.  Thus, petitioners are liable for the              
          addition to tax under section 6651(a)(1).                                   
          Issue 3.  Accuracy-Related Penalty, Section 6662(a)                         
               Respondent determined that petitioners are subject to an               
          accuracy-related penalty under section 6662(a) for a substantial            
          understatement of tax.  Sec. 6662(b)(2).  The deficiency here               
          determined is a substantial understatement.  See sec.                       
               Section 6664(c)(1), however, provides that the penalty under           
          section 6662(a) shall not apply to any portion of an underpayment           
          if it is shown that there was reasonable cause for the taxpayers'           
          position with respect to that portion and that the taxpayers                
          acted in good faith with respect to that portion.  The                      
          determination of whether petitioners acted with reasonable cause            
          and in good faith depends upon the pertinent facts and                      
          circumstances.  Sec. 1.6664-4(b)(1), Income Tax Regs.  The most             
          important factor is the extent of the taxpayers' efforts to                 
          assess their proper tax liability for the year.  Id.                        

          6  Respondent states on brief that petitioners were also                    
          negligent.  However, because we find petitioners liable for the             
          accuracy-related penalty due to their substantial understatement            
          of income tax, we need not address the negligence issue.                    

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