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6662(a). Under section 6662, a penalty is added to a
taxpayer's tax liability if any portion of an underpayment
is attributable to negligence or disregard of the rules or
regulations, see sec. 6662(b)(1), or attributable to a
substantial understatement of income tax, see sec.
6662(b)(2). For this purpose, an understatement is
"substantial" if it exceeds the greater of $5,000 or 10
percent of the tax required to be shown on the taxpayer's
return. Sec. 6662(d). The amount of the penalty is 20
percent of the portion of the underpayment to which the
section applies. See sec. 6662(a).
In this case, petitioners’ understatement was
substantial. Petitioners did not address this issue at
trial, in their petition, trial memorandum, or posttrial
brief. By failing to address the issue, petitioners have
conceded it. See, e.g., Money v. Commissioner, 89 T.C. 46,
48 (1987). Accordingly, we sustain respondent's
determination that petitioners are liable for the accuracy-
related penalty.
The final issue for decision is whether petitioners
are liable for an addition to tax under section 6651(a)(1)
for 1993. If a taxpayer fails to file an income tax return
on time, section 6651(a)(1) imposes an addition to tax
unless the failure was "due to reasonable cause and not
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