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underpayment (i.e., one that exceeds $1,000) in any taxable year
in which the understatement is "attributable to 1 or more tax
motivated transactions". Petitioners bear the burden of proof as
to this issue. See Rule 142(a); Boyd v. Commissioner, 101 T.C.
365, 373 (1993).
In Seykota v. Commissioner, T.C. Memo. 1991-234,
supplemented by T.C. Memo. 1991-541, we found that the FTI/Merit
transactions were tax-motivated transactions within the meaning
of section 6621(c). We again made the same finding with respect
to the Merit T-bill and stock forward trades in Leema
Enterprises, Inc. v. Commissioner, T.C. Memo. 1999-18.
Petitioners have presented no evidence to show that these
findings should not apply to them. Accordingly, the additional
interest imposed by section 6621(c) is applicable to
petitioners.5
3. Substantial Understatement of Tax Under Section 6661
Respondent has determined additions to tax under section
6661 for 1982. For returns due after December 31, 1982 (but
before January 1, 1990), section 6661 provides for an addition to
tax equal to 25 percent of the amount of any underpayment
attributable to a substantial understatement. An understatement
5 The First Stipulation of Facts recites that some of the
deficiencies at issue related to the Dorchester project, as
opposed to the FTI/Merit programs. In a stipulation filed July
1, 1992, however, the parties agreed that petitioners were
entitled to only 25 percent of the claimed deductions relating to
the Dorchester project and, further, that any underpayments
attributable to Dorchester transactions were attributable to
"tax-motivated transactions" within the scope of sec. 6621(c).
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