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cash; he did not use his own name on the bank account to avoid
detection of his illegal activity and income. We are satisfied
that respondent has proven by clear and convincing evidence that
petitioner had a fraudulent intent. Petitioner is liable for the
additions to tax for fraud under section 6653(b)(1)(A) and (B).
Consequently, we do not need to consider respondent’s alternate
assertion that petitioner is liable for additions to tax for
negligence.
Addition to Tax Under Section 6661
The final issue for our consideration is whether petitioner
is liable for a section 6661 addition to tax. Section 6661(a)
imposes an addition to tax of 25 percent of any underpayment
attributable to a substantial understatement of tax. An
understatement is the excess of the correct tax over 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
correct tax or $5,000. Sec. 6661(b)(1)(A). The understatement
can be eliminated if substantial authority existed for the
taxpayer’s treatment of the item in dispute or if the taxpayer
adequately disclosed relevant facts regarding treatment of the
item on the return. Sec. 6661(b)(2)(B); sec. 1.6661-4(a), Income
Tax Regs. Petitioner has the burden to show that he is not
liable for the section 6661 addition to tax. Rule 142(a).
Petitioner has not made any arguments or presented any evidence
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