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attributable to the land sale proceeds was due to fraud. Thus,
petitioner is not liable for the addition to tax under section
6653(b)(2) for 1984 for that underpayment.
D. Substantial Understatement of Income Tax
The next issue for decision is whether petitioner is liable
for the addition to tax under section 6661(a) for 1984 for
substantial understatement of income tax. Section 6661(a)
imposes an addition to tax equal to 10 percent of the amount of
any underpayment attributable to a substantial understatement of
income tax.
An understatement is the amount by which the correct tax
exceeds the tax reported on the return. Sec. 6661(b)(2)(A). 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). Petitioner bears the burden of proving that
he is not liable for the addition to tax under section 6661(a).
Rule 142(a); Tweeddale v. Commissioner, 92 T.C. 501, 506 (1989).
If a taxpayer has substantial authority for the
tax treatment of any item on the return, the understatement
is reduced by the amount attributable to it. Sec.
6661(b)(2)(B)(i). The amount of the understatement is reduced
for any item adequately disclosed on the taxpayer's return or in
a statement attached to the return. Sec. 6661(b)(2)(B)(ii).
Petitioner does not contend that these exceptions apply here.
Petitioner has offered no evidence or argument that he is not
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