- 13 -13
contention. Accordingly, petitioners are liable for the section
6651(a)(1) additions to tax.
IV. The Accuracy-Related Penalties
Respondent also determined that for 1990 through 1993
petitioners were liable, pursuant to section 6662(a), for
substantial understatements of tax penalties. Section 6662(a)
imposes a penalty equal to 20 percent of the amount of any
underpayment attributable to a substantial understatement of
income tax. Pursuant to section 6662(d), an understatement is
the amount by which the correct tax exceeds the tax reported on
the return. The understatement is substantial if it exceeds the
greater of $5,000 or 10 percent of the correct tax. Sec.
6662(d)(1)(A).
Respondent calculated petitioners' understatement by
subtracting the tax reported on their originally filed returns
from the tax that should have been reported on those returns.
Petitioners contend that the amount of any understatement should
be based on the tax reported on the amended returns for 1990,
1991, and 1992 instead of the original returns for those years.
We reject petitioners' contention. Petitioners filed their
returns only upon the demand of the IRS collection officer that
seized their retail store. Under these circumstances, we
conclude that it was appropriate for respondent to use the amount
reported on petitioners' original returns. See sec. 1.6662-
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