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Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-1(c)(1),
Proced. & Admin. Regs. Petitioners' return was due on April 15,
1993, and was not filed until on or about April 26, 1993.
Petitioners argued that they did not believe they owed any tax,
but their mistaken belief is not reasonable cause for failure to
timely file a return. Linseman v. Commissioner, 82 T.C. 514, 523
(1984); Cox v. Commissioner, 54 T.C. 1735, 1744 (1970).
Therefore, we find petitioners liable for the addition to tax
under section 6651(a)(1).
Penalty for Substantial Understatement of Tax
Respondent also determined that petitioners are liable for
the accuracy-related penalty for substantial understatement of
tax under section 6662(b)(2). Since petitioners have not
provided substantial authority for the positions taken on their
return, or made any disclosure within the meaning of section
6662(d)(2)(B)(ii), the penalty is sustained in the event that the
Rule 155 computation indicates that petitioners' understatement
of tax exceeds the greater of $5,000 or 10 percent of the amount
of tax required to be shown on the return.
To reflect the foregoing and concessions,
Decision will be entered
under Rule 155.
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