- 67 -
considered. Wright v. Commissioner, supra at 643-644. As we
have held above that respondent has not established by clear and
convincing evidence an underpayment by Giongo for 1982,
respondent has not proved fraud for that year, and the expiration
of the period of limitations bars assessment and collection of
tax for that year. For 1983, we hold that there is clear and
convincing evidence of an underpayment which, when combined with
other evidence, including Giongo's convictions for racketeering
and filing a false return, establishes fraud for 1983.
Accordingly, the period of limitations does not preclude
assessment and collection of tax for that year, and we hold that
Giongo is liable for the additions to tax under section
6653(b)(1) and (2) as to his entire underpayment for 1983.
III. Additions to Tax Under Section 6661
Section 6661(a) imposes an addition to tax of 25 percent of
any underpayment attributable to a substantial understatement of
income tax. A substantial understatement is any understatement
which exceeds the greater of (1) 10 percent of the tax required
to be shown on the return or (2) $5,000. Sec. 6661(b)(1). If
the taxpayer has substantial authority for the tax treatment of
the item in question, or if the taxpayer adequately discloses the
tax treatment of the item on the return, then the amount of the
understatement for purposes of this section will be reduced by
that portion of the understatement which is attributable to that
item. Sec. 6661(b)(2)(B).
Page: Previous 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 NextLast modified: May 25, 2011