Gerald and Kathleen Chamales - Page 22




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          negligence 291,931”, followed by “Underpayment due to substantial           
          understatement 0”.  As respondent has not amended his pleadings             
          to assert an underpayment due to substantial understatement, this           
          issue was not properly raised.  In addition, we also observe that           
          the section 6664(c) reasonable cause exception is equally                   
          applicable in the case of a section 6662(a) penalty attributed to           
          a substantial understatement of income tax.  Respondent’s                   
          determination of an accuracy-related penalty is denied.                     
               To reflect the foregoing,                                              


                                                  An appropriate order will           
                                             be issued, and decision will             
                                             be entered for respondent with           
                                             respect to the deficiency and            
                                             for petitioners with respect             
                                             to the accuracy-related                  
                                             penalty.                                 


















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