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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.
6662(d)(1).6
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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