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Respondent also determined that petitioners are liable for
additions to tax under section 6653(a)(1)(A) and (B). This Court
has defined negligence as a lack of due care or failure to do
what a reasonable and ordinarily prudent person would do under
the circumstances. McGee v. Commissioner, 979 F.2d 66, 71 (5th
Cir. 1992), affg. T.C. Memo. 1991-510; Neely v. Commissioner, 85
T.C. 934, 947 (1985). Respondent made numerous adjustments to
petitioners' income and deductions for 1987. Petitioners have
not presented any evidence either at trial or on brief to
convince us that their omissions from gross income and excess
deductions were not the result of negligence. Therefore, we
sustain respondent's determination.
Additions to Tax for Substantial Understatement of Income Tax
The final issue for decision is whether petitioners are
liable for additions to tax under section 6661. Section 6661(a)
provides for an addition to tax equal to 25 percent of the amount
of any underpayment attributable to a substantial understatement
of income tax. Pallottini v. Commissioner, 90 T.C. 498, 503
(1988). An understatement is substantial if it exceeds the
greater of 10 percent of the tax required to be shown on the
return or $5,000. Sec. 6661(b)(1)(A). However, the amount of
the understatement may be reduced under section 6661(b)(2)(B) for
amounts adequately disclosed or supported by substantial
authority. Petitioners have not addressed this issue on brief,
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