- 50 - Petitioners’ understatements of income tax each exceed the greater of 10 percent of the tax required to be shown on the returns or $5,000. Consequently, there are substantial understatements within the meaning of section 6661. On brief, petitioners contend only that they reasonably and in good faith relied on the advice of their accountants in preparing their tax returns. Ostensibly, petitioners seek thereby to invoke the Commissioner’s authority to waive the addition to tax pursuant to section 6661(c). The Commissioner’s denial of waiver under section 6661(c) is reviewable for abuse of discretion. See Martin Ice Cream Co. v. Commissioner, 110 T.C. 189, 234 (1998). The record does not show that petitioners ever requested respondent to waive the penalty. Accordingly, absent such a request by petitioners, we cannot find that respondent abused his discretion. See id. at 234-235, and cases cited therein.35 Even if we were to assume arguendo that petitioners did request waivers pursuant to section 6661(c), petitioners have not established that respondent would have abused his discretion in refusing the requests. Petitioners have not proved that they provided their accountants with complete information for preparing their returns. The evidence shows that the books and 35 Under sec. 6664(c) of current law, effective for returns with a due date after Dec. 31, 1989, no penalty may be imposed for understatements if the taxpayer shows that it had reasonable cause and acted in good faith. See Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, sec. 7721(a), 103 Stat. 2398.Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 Next
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