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income tax. Section 6662(d) defines a substantial understatement
as an understatement of income tax for the taxable year that
exceeds the greater of 10 percent of the tax required to be shown
on the tax return or $5,000. If, however, the taxpayer can show
that either substantial authority exists for the treatment of the
items at issue or the taxpayer has adequately disclosed such items,
and that there is a reasonable basis for petitioner’s tax treatment
of the item, section 6662(a) will not apply. See sec.
6662(d)(2)(B); Rule 142(a).
Petitioner argues that the substantial understatement penalty
should not be imposed because (1) he believed in good faith that he
owed no obligation to either report or pay taxes on the $99,880,
and (2) substantial authority exists supporting the conclusion that
mere couriers are not the owners of property. We do not believe
petitioner acted either reasonably or in good faith. As stated
supra, we believe petitioner was the owner of the money and did not
act as a mere courier. Consequently, we sustain respondent's
imposition of the accuracy-related penalty.
In reaching our conclusions herein, we have considered all
arguments presented and, to the extent not discussed above, find
them to be without merit.
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Last modified: May 25, 2011