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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.
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